1.

Orange Valley Media just bought supplies from Violet Sky Entertainment. Orange Valley Media has been offered the 3 possible payment options described in the table. If the discount rate is 10.93 percent, which of the assertions is true?

Option	Terms of payment (amount and timing) from Orange Valley Media to Violet Sky Entertainment
A	23,587 dollars in 3 year(s)
B	36,024 dollars in 7 years
C	49,061 dollars in 10 years

Violet Sky Entertainment should prefer option A more than option B, and Violet Sky Entertainment should prefer option A more than option C

Violet Sky Entertainment should prefer option A more than option B, and Violet Sky Entertainment should prefer option C more than option A

Violet Sky Entertainment should prefer option B more than option A, and Violet Sky Entertainment should prefer option C more than option A

Violet Sky Entertainment should prefer option B more than option A, and Violet Sky Entertainment should prefer option A more than option C

2. Sasha owns two investments, A and B, that have a combined total value of 40,800 dollars. Investment A is expected to pay 29,600 dollars in 5 year(s) from today and has an expected return of 9.32 percent per year. Investment B is expected to pay X in 4 years from today and has an expected return of 15.25 percent per year. What is X, the cash flow expected from investment B in 4 years from today?

3. Fairfax Paint is planning to sell its McLean, Springfield, and Falls Church stores in T years from today. The firm expects to sell its McLean store for a cash flow of H dollars, its Springfield store for a cash flow of H dollars, and its Falls Church store for a cash flow of M dollars. The cost of capital for the Falls Church store is Q percent, the cost of capital for the Springfield store is W percent, the cost of capital for the McLean store is Q percent, H > M > 0, Q > W > 0; and T > 0. The cash flows from the sales are the only cash flows associated with the various stores. Based on the information in the preceding paragraph, which one of the following assertions is true?

		Two of the three stores have equal value and those two stores are more valuable than the third store or all three stores have the same value
		The McLean store is the most valuable of the 3 stores
		The Falls Church store is the most valuable of the 3 stores
		None of the other assertions is true
		The Springfield store is the most valuable of the 3 stores