1. You are considering an annuity which costs $88,656 today. The annuity pays $6,100 a year at an annual interest rate of 5.5 percent. What is the length of the annuity time period?
2. A project has an initial cost of $8,800 and produces cash inflows of $2,700, $5,000, and $1,500 over the next three years, respectively. What is the discounted payback period if the required rate of return is 7 percent?
3. Stan (40) receives a lump sum of $10,000 from his superannuation fund under the severe financial hardship condition of release. His balance consists entirely of taxable component (taxed element). How much tax will Stan pay on the lump sum (excluding Medicare levy)?