1. Audrey plans to invest $4,500 at the end of each year for the next seven years. Assuming a 10% interest rate, what will her investment be worth seven years from now?
2. Assuming a 10% interest rate, how much would Jessica have to invest now to be able to withdraw $9,000 at the end of every year for the next nine years?
3. (A) Chrostopher is considering a capital investment that costs $495,000 and will provide the following net cash inflows.
year 1 = $302,000 in net cash inflow
year 2 = $208,000 in net cash inflow
year 3 = $ 98,000 in net cash inflow
So, Using a hurdle rate of 8%, find the NPV of the investment.
(B) What is the IRR of the capital investment described in the Question?