1.You want to purchase a business with the following cash flows. How much would you pay for this business today? You have to have a 14% return to make this deal work. You will receive the cash at the end of the year?

a.First year $150,000

b.Second year $175,000

c.Third year$225,000

d.Forth year$275,000

How much would you pay for this business today assuming you have an 18% return to make this deal work? (Same problem as above.)

What type of a problem is this? _______________