1. Presume the school fundraiser is selling favors. It promises the heavenly equivalent of $225 every month forever and beginning this month (immediately). If the prevailing annual interest rate were 7%, what would you be willing to donate to the school fundraiser in exchange?
2. A project will yield cash flows of $60,000 in each of the next 5 years, with the first payment occuring in 1 year. The interest rate is 17%. How much would you be willing to pay to invest in this project (i.e, what is the PV of the cash flows)?