1. AA, Inc. is considering the purchase of ZZ Co. AA believes that ZZ Co. can generate cash flows of $65,000, $98,000, and $174,000 over the next three years, respectively. After that time, AA feels ZZ will be worthless. AA has determined that a 12% rate of return is applicable to this potential purchase. What is the fair price for ZZ Co.?
A. $247,640.12
B. $256,114.70
C. $260,010.48
D. $264,218.44
E. $275,018.24
2. You own a single-family home insured for $240,000 under a standard homeowner's insurance policy. What is the amount of insurance on your personal property?
a. $24,000
b. $100,000
c. $120,000
d. $240,000