1) (10%) A corporation agreed to loan one of its subsidiaries $100,000 for three year. The note states an interest rate of 5% with annual compounding. $25,000 payments are to be made at the end of years 1 and 2, with the remaining balance to be paid at the end of year 3. Calculate the amount of interest the subsidiary will pay each year. 2) (10%) Your company has $50,000 of additional funds it will need in three months to pay annual employee bonuses. The money is sitting in an account that pays no interest. The company can invest it all into 13-week (91 day) Treasury bills, with a discount rate of 0.185%. A. How much of the investment will the government utilize? B. How much total interest will the company earn on the funds? C. How much money will the government pay back to your company at maturity? 3) (10%) A Major League Baseball team signs a free agent player to a new contract, which includes a $2 million signing bonus. If the player puts the money into an account earning 9%, compounded quarterly, how much will be in the account at the end of 5 years when his contract expires? 4) (10%) Your company is owed a lump sum payment of $400,000 in one year. The customer that owes the money has offered to settle the account now for $390,000. If your company can earn 3% on similar investments, what is the minimum amount you would accept now as a payoff? Based just on the figures, would you accept the offer? Explain. 5) (10%) An assembly plant anticipates needing to replace some of its machinery in 4 years, at a current cost of $2 million. The company expects annual inflation of 3%. It also believes it can earn an 8% return on its money, compounded quarterly. How much money would the company have to put into an account now in order to have the anticipated future cost of the machinery available to withdraw at the end of 4 years