2. Discuss and explain the Time Value of Money (TVM) calculation(s) or method(s) that you would apply to the following Discounted Cash Flow (DCF) valuation problems:

Hint: You may want to perform the required calculations to answer these questions.

a. You are considering buying a business priced at $75,000. The interest rate used to value similar business opportunities is 10%. Your financial advisor presents you with the two (2) (opportunities shown below). Decide which business should you acquire? Explain/discuss the financial basis for your decision.

	Year 1	Year 2	Year 3
Business A: Cash Flows	$50,000	$30,000	$20,000
Business B: Cash Flows	$5,000	$5,000	$100,000

b. You are planning to buy a condominium in 3 years and estimate that you will need $30,000 for a down payment. If the interest rate you can earn at the bank is 4%, and you can save $5,000 today, $7,500 at the end of the first year, and $10,000 at the end of the second year, discuss/explain how do you estimate the amount of money you will need to come up with at the end of the third year to have the $30,000 down payment.

c. Last year, a gourmet coffee shop located in New York Citys Grand Central Station, with a 50-year lease, produced annual cash flows of $400,000 (after all expenses were deducted). If the stores cash flows are expected to grow at 3% per year (due to inflation), and similar businesses are valued using an annual interest rate of 7%, discuss/explain how you would estimate the value of this coffee shop. What TVM concept(s) or method(s) would you use?