1. How many years would be required to pay offa loan with the following characteristics? $11,500 RATE 8.896 PMT $1,590 [annual payments} 2. What is the annual payment required to pay offa loan with the following characteristics? 3. Why is W not part oftl'e calculations for eitl'er question 1 or question 2? 4. At what annual rate of interest is a loan with tl'e following characteristics? For questions 5-8, LGI's cost of capital is 8.15% 5. LGI projects the following after-tax cash flows from operations from its aging Bowie, Maryland distribution facility (which first went on line in 1953) over the next five years. What is the PV of these cash flows? Projected after-tax cash flows Year (in $ millions) (45 (45 45 (45 6. LGI extended the analysis out for an additional 7 years, and generated the following projections. What is the PV of these cash flows? Projected after-tax cash flows Year (in $ millions) (45 (45 45 45 45 45) (45 (45 45 10 45 11 (45) 12 (45)7. The CFO asked you to undertake a more detailed analysis of the plant's costs, noting that while it is convenient for making calculations when projections result in data that can be treated like an annuity, this does not always represent the most accurate estimate of future results. What is the PV of these cash flows? Projected after-tax cash flows Year (in $ millions) 1 (45 50 AWN 55 60 170 B. Because the estimates of the cash flows in Qs5-7 are all negative, LGI is considering selling the Bowie property and using other existing facilities more efficiently. LGI received four preliminary offers from potential buyers for the Bowie property. What is the PV of each offer? From a profit maximizing point of view, which offer should LGI accept? Offer A $101.9 million, paid today Offer B $19.9 million per year, to be paid over the next 8 years Offer C $201.9 million, to be paid in year 8 Offer D $17.9 million per year, to be paid over the next 7 years plus a $51.9 million payment in year 8 9. Define the term annuity in your own words. How might the concept of an annuity impact the process of capital budgeting and new asset acquisition