#2: You have $100,000 that you want to invest in a one year Certificate of Deposit (CD) with a 2.78% annual interest rate. What will be the value of that CD in a year?

#3 - Your company has chosen to take on two projects. The first is for three years and pays $1,560,000 annually. The second is for four years and pays $2,000,000 annually. The interest rate for both is 5.5%. What is the Future Value of this portfolio? What is the present value of this portfolio?

#4 - The Sody Soda Company is looking to expand its offerings of soft drinks into the sweet tea market. In order to add this product line, the company will need to purchase a manufacturing facility and invest additional money into upgrades of the facility, as well as the equipment necessary to manufacture the new sweet tea line. The anticipated start up costs are $2.75 million, with a cost of capital of 3.75%. The project manager predicts cash flows from this new product line will be $200,000 for the first year, with an increase of $100,000 for each subsequent year. Management wants to know if the project should be persued, or if the company will ultimately lose money from the project, over a 5 year time period. What is the projected NPV for this expansion? Do you recommend management pursue the project, or pass on the opportunity? Why? NPV = original investment + annual cash flows