1) Using an 8% interest rate, convert this series on irregular cash flows to an equivalent (in PV) 3 year annuity. What would be the annuity amount per year?
1. 20,000
2. 15,000
3. 10,000
A. 13,068.03
B. 12,758.31
C. 10,999,63
D. 15,256.28
2) If a firm’s price to earnings ratio is 10,
A. It is not possible for it to be paying dividends also
B. It’s Market to book ratio has to be at least 2.0
C. It’s EAT/Sales Ratio is positive
D. It’s return on stockholders equity is negative