1.

If Taylor Greene invests a maximum of __________ today at a rate of 8.7%, then he will approve a house renovation project that will last for the next 7 years and is expected to generate a $101,200 annuity during that time.

Multiple Choice

• $514,502.63

• $427,526.73

• $922,559.54

• $458,064.36

• $497,588.37

2.

Today, Northwest Agricultural is investing $31,800 in a pears project with a cost of capital of 8.8%. The pears project will produce cash flows of $12,600 and $12,900, over the next two years, respectively. During its final two years, the pears project will produce cash flows of $16,000 and $10,500, respectively. What is the profitability index of the 4-year pears project?

Multiple Choice

• 1.500

• 1.111

• 1.222

• .750

• 1.333