1) A nuclear waste storage facility will reduce health risks in perpetuity, valued in the amount of $800,000 per year. The annual operating costs of the facility are $150,000 in perpetuity. The discount rate is 6%. Question: how high could the initial investment cost be for this investment to have an NPV > 0?
2) You have borrowed $75,000 to be repaid, with interest, in 10 equal yearly installments. If interest on the unpaid balance is assessed at the rate of 8% per year, how large will each year’s payment be?
3) The net-profit stream of a business at the end of each of 4 years will be $9,500, $13,500, $11,500, and $13,500. What is the present value of this net-profit stream at 9%? The annual worth each period?