4. (1pt) The reason that you can borrow more with an annuity due, meaning the PV is higher, is: a. Because the discount rate is lower b. Because the lender is getting the first payment earlier so it's worth more c. Because the PV of the earlier payment is lower 5. (1pt) If you were evaluating what you would be willing to pay for an annuity, and your required retur INCREASED from 10% to 14%, what would happen to the amount that you would be willing to pay? a. Increase b. Decrease - if you discount the cash flows at a higher rate, the PV would be lower c. It would not change