1. An even stream of payments over equal time periods where the interest rate is constant is referred to as a(n): a. Post-annuity. b. Accumulated Annuity due. c. Pre-annuity. d. Annuity.

2. An investment that costs $25,000 will produce annual cash flows of $5,000 for a period of 6 years. Given a desired rate of return of 12%, the investment will generate a (round your answer to the nearest whole dollar): a. Negative net present value of $4,443. b. Positive net present value of $20,557. c. Positive net present value of $5,000. d. Negative net present value of $25,000

3. Grange Company has the opportunity to purchase an asset that costs $45,000. The asset is expected to increase net income by $15,000 per year. Depreciation expense will be $5,000 per year. Based on this information the payback period is: a. 3 years. b. 2.25 years. c. 9 years. d. 2.5 years.

4. An investment that costs $30,000 will produce annual cash flows of $10,000 for a period of 4 years. Given a desired rate of return of 8%, the benefit of the investment today is: a. $40,000. b. $30,000. c. $25,000. d. $33,121.