1. Why might one firm have positive cash flows and be headed for financial trouble, whereas another firm with negative cash flows could actually be in a good financial position?
2. An investment is expected to result in equal payments of $300 at the end of each of the next 8 years (ordinary annuity). If the appropriate required rate of return (discount rate) is 4%, what is the future value of the annuity stream? (annua compounding).