1. An investment project has annual cash inflows of $4300, 4900, 5400, and 5600, and a discount rate of 12 percent. What is the discounted payback period for these cash flows if the initial cost is $6,000? What if the initial cost is $9,000? What if it is $13000?
2. How much will you pay into principal on a 7 3/8% (=7.375%), $160,000, 15 year mortgage in the final 2 years of the mortgage, assuming monthly compounding?
3. List and explain the Ohlson’s clean surplus formula and OJ residual income valuation model.