1.

Find the present value of the following stream of cash flows, assuming that the firms opportunity cost is 14 percent. (SHOW YOUR CALCULATION)

Years 1-5 $20,000 per year

Years 6-10 $35,000 per year

2.

Darlene wishes to accumulate $50,000 by the end of 10 years by making equal annual endofyear deposits over the next 10 years. If Darlene can earn 5 percent on her investments, how much must she deposit at the end of each year? (SHOW YOUR CALCULATIONS)

3.

Betty borrows $50,000 at 10 percent annually compounded interest to be repaid in four equal annual installments. The actual endofyear loan payment is (SHOW YOUR CALCULATIONS)