1.Suppose we invest $500 in Public Storage REIT stock and hold it for three years.Our dividends are as follows: $40, $43, and $48. We sell the stock at the end of the holding period and on our last dividend date for $560.What is our annual return using IRR?

2.We decide to invest $10,000 in Plum Creek Timber REIT stock and hold it for five years.Our dividends are as follows: $75, $75, $78, $78, and $81.We sell the stock at the end of the holding period and receive $12,000.What is our annual return using IRR?

3.Joe decides to purchase new insulated windows for his 150-year-old home.These windows should save him approximately $100 a month on his utility bills over 15 years.The original cost of the windows is $10,000 and Joe's discount rate is 8%.What is the NPV? Should he purchase the windows? Why or why not?

4.Michelle buys a new central air unit for her home.The unit is expected to save $35 a month from her electricity bill over the next eight years.The original cost of the unit is $7,500 and her discount rate is 5%.What is the NPV? Should she have purchased the unit?Why or why not?

5.Racine is thinking of buying a new home.Currently, she owns an older home that costs her approximately $11,000 a year.The cost of the new home is $150,000.She can obtain a $120,000 mortgage for 30 years at 4% interest.The home has no homeowner's association dues.Annual costs for property taxes, hazard insurance and estimated landscaping/maintenance is approximately $450, $1,000, and $600.She estimates that she will live in the home for six years and resell it for $185,000.Racine's discount rate is 7%.

Is this a good investment according to NPV? IRR?What if the older home cost $14,000 a year?

6.Terrie is thinking of buying a new home.Currently, she owns an older home that costs her approximately $30,000 a year.The cost of the new home is $320,000.She can obtain a $255,000 mortgage for 20 years at 3.5% interest.The home has homeowner's association dues of $150 a month.Annual costs for property taxes, hazard insurance, and estimated landscaping/maintenance is approximately $1,250, $1,500, and $1,500.She estimates that she will live in the home for 10 years and resell it for $400,000.Terrie's discount rate is 5%.Is this a good investment according to NPV? IRR?What if the older home cost $35,000 a year?