1. A business promises to pay the investor of $3000 today for a payment of $750 in one? year's time, $1500 in two? years' time and $1500in three? years' time. What is the present value of this business opportunity if the interest rate is 5% per year?
2. At the end of last year, a firm has $2.2 million in balance sheet equity, 3.5 million common shares outstanding, and the price per share of common stock was $37.6. What was the firm’s market value to book value ration (also called price to book ratio)?
3. You just received a loan offer from Friendly Loans. The company is offering you $5,000 at 9.3 percent interest. The monthly payment is only $100. If you accept this offer, how long will it take you to pay off the loan?