1. McKenna Sports Authority is getting ready to produce a new line of gold clubs by investing $1.85 million. The investment will result in additional cash flows of $525,000, $842,500, and $1,200,000 over the next three years. What is the payback period for this project?
2. For a deposit, what APR compounded quarterly will produce the same effective annual rate as 22% APR compounded monthly?
3. What is the maximum amount a firm would be willing to pay today for a five year investment that pays $100 for the next five years and $1,000 in the fifth year if the firm has a desired rate of return of 10%? a $1,000 b $950 c $1,250 d $1,400