1. A computer costs $460 in the United States. The same model costs 705 euros in France. If purchasing power parity holds, what is the spot exchange rate between the euro and the dollar? Do not round intermediate calculations. Round your answer to two decimal places.
2. A couple purchased a house by taking out a $249,000 mortgage (loan) with monthly payments for 30 years. The interest rate on the loan was 6.125% compounded monthly. If they pay $100 extra each month, how long will it take to pay the loan?
3. Consider an asset that costs $220,000 and is depreciated straight-line to zero over its 13-year tax life. The asset is to be used in a 7-year project; at the end of the project, the asset can be sold for $27,500. Required : If the relevant tax rate is 34 percent, what is the aftertax cash flow from the sale of this asset?