1 - The management of KADJI expects to receive cash revenues of $120m, $180m and $300m four, five and six years from now, respectively.KADJI can earn an annual return of 5%, compounded annually, on money invested today.

What is the present value of this cash stream now, in millions?

2 - KD CORP has outstanding preferred stock which pays an annual dividend of $1.575.Assume that KDC has just paid its annual dividend and that KDC remains in business into perpetuity.You can earn an annual return of 6.225%, compounded annually, on money invested today.

What is the value of one share of KDC preferred now?

3 - You are considering buying land near HANOI.Once bought, you could divide the land into two lots. You estimate could sell one lot two years from now for $550,000 and the other lot 4 years from now for $750,000. You can earn an annual return of 12%, compounded annually, on money invested today in other real estate ventures.

What is the most you should pay for the land today?

4 - SUCES INC is analyzing a new project.Management expects to spend $10m on new equipment three years from now and to receive cash benefits in years 4, 5, 6, and 7 of $5m, $5m, $5m and $8m, respectively.SUCES INC can earn an annual return of 6%, compounded annually, on money invested today in similar projects.

What is the present value of this stream today, in millions of dollars?