1. Mark Barton owns a garage and is contemplating purchasing a tire retreading machine for $26,000. After estimating costs and revenues, Mark projects a net cash flow from the retreading machine of $4,400 annually for 8 years. Mark hopes to earn a return of 8 percent on such investments.

What is the present value of the retreading operation?

2. Patty Schleis invests $13,567.65 now for a series of $3,300 annual returns beginning one year from now. Patty will earn a return of 12% on the initial investment.

How many annual payments of $3,300 will Patty receive?

3. If Colleen Mooney invests $2,872.68 now and she will receive $12,000 at the end of 15 years, what annual rate of interest will Colleen earn on her investment?

4. Joanne Quick made an investment of $22,734.91. From this investment, she will receive $3,700 annually for the next 10 years starting one year from now. What rate of interest will Joannes investment be earning for her?

5. Arthur Company is considering investing in an annuity contract that will return $31,200 annually at the end of each year for 20 years. What amount should Arthur Company pay for this investment if it earns a 11% return