1) If your needed rate of return was 12% a year, how much would you pay today for $100 a month forever? (i.e., the stream of $100 monthly payments goes on forever, continuing to be paid to your heirs after your death)
2) (PV of the uneven cash flow stream) determine the PV of following project? (Suppose r = 10%)
Year Cash Flow
1 $10,000
2 $10,000
3 $10,000
4 $20,000
3) (FV of the uneven cash flow stream) determine the FV at the end of year 4 of the given project? (Suppose r = 10%)
Year Cash Flow
1 $10,000
2 $10,000
3 $10,000
4 $20,000
Requirements:
Min Pages: 4