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A. What is the net present value (NPV) of an investment of $1000 that returns $1500 in three years, using a discount rate of 10%?

B. What is the NPV of a $5000 investment that is worth $10,000 at the end of five years, if we wanted to earn 15% on the investment?Did we earn our required 15%? How can you tell?

C. What is the present value of a stock that pays a $1 dividend in perpetuity, if you wish to earn a 10% return? What would you be willing to pay for the stock?

D. . You are considering buying stock in a company that currently pays a $1 annual dividend. The dividend is expected to increase by 3% annually in perpetuity, and you wish to earn a 12% return on the investment. How much would you be willing to pay for the stock?

E. You are considering an investment in an existing company; the company pays a $3.00 quarterly dividend per share. After three years you believe that you can sell the stock for $100 per share. If you wish to earn a 12% return, how much would you be willing to pay for the stock today? (hint: this is a quarterly dividend, so the discounting period is a quarter, and the quarterly discount rate is the annual rate divided by 4. Set this up in an Excel file for the calculations).