1. If you carry an auto liability insurance requirement of 20/40/10 and are in a car accident where there are three persons in the other car whose medical bills are $7,250, $10,500, and $30,000, how short are you on coverage?
2. What is the maximum that should be invested in a project at time zero if the inflows are estimated at $50,000 annually for 3 years, and the cost of capital is 9%?
3. What is the NPV of the project with the following cash flows?
Year 0: -$400
Year 1: $200
Year 2: $200
Year 3: $400
The WACC for the project is 10%