1. Suppose that one year from now you will receive $300 and that at the end of every year thereafter you will receive a payment that is 2% larger than the prior payment. If the cost of capital is 7% what is this stream of cash flows worth today?
2. Suppose that one year from now you will receive $550. At the end of each of the next four years you will receive a payment that is 4% bigger than the prior payment. Following year five you will receive a payment at the end of every year that is 3% larger than the prior payment. If the cost of capital is 12% what is the this stream of cash flows worth today?
3. What constant payment for the next 10 years (starting 1 year from now, 10 payments) would be equivalent to receiving $450 every other year starting 10 years from now. Assume the annual cost of capital is 15%.
4. Suppose you own two assets with the following payouts. (1) $800 at the end of every year starting 1 year from now. The annual cost of capital for these cash flows is 6%. (2) $200 one year from now and a cash flow that is 3% larger than the prior cash flow every year thereafter. The annual cost of capital for these cash flows is 12%. What is the weighted average cost of capital of this two asset portfolio? (enter your answer as a percent, e.g. 2.51. Do not include the "%" sign).