1. What are two ways that a financial institution can benefit from knowing the Federal Reserve Discount Rate.
2. Project L costs $45,000, its expected cash inflows are $14,000 per year for 6 years, and its WACC is 9%. What is the project's payback? Round your answer to two decimal places.
3. A continuous perpetuity has a rate of payment of 10 per year for the first 5 years and 20 per year thereafter. If the annual effective rate of interest is 8%, find the present value of this perpetuity.