a.

The Wellington family has an offer to sell a plot of land to Land Developers, Inc. (LDI) for $1,030,000. However, to allow LDI time to generate the required payment from its operations, the Wellingtons must agree to delay collection of the money for a 4 year period. The Wellingtons have an alternative offer to sell the land to Sunshine Properties. Sunshine has the cash available to make an immediate cash payment for the property. Assuming a 10% required rate of return, what price would Sunshine be required to pay in order to match LDI's offer? (Use the PV of $1 table) (Round your answer to the nearest whole dollar.)

a. 3264961

b.1,030,000

c.703503

d. 781315

b.

John Lang was injured in a car accident. As the result of his injuries Mr. Lang won a legal case that allows him to collect $13,000 cash per year for five years. In order to pay his medical bills, Mr. Lang needs his money now. Assuming an ordinary annuity and a 6% required rate of return, which of the following represents the amount of cash a financing company would be willing to pay today to buy the annuity owed to Mr. Lang? (Use the PVA of $1 table) (Round your answer to the nearest whole dollar.)

a.54761

b.65000

c.47288

d.none of answers are correct

c.

Mendez Gaming Company has an opportunity to purchase a pinball machine. The machine is expected to produce a net cash inflow of $1,700 per year for 5 years and to have a $1,300 salvage value at the end of the machine's useful life. Assuming an ordinary annuity and a 5% required rate of return, the present value of the machine is (Use the PV of $1 and PVA of $1 tables) (Round intermediate and final answer to the nearest whole dollar.)

a.8379

b.7360

c.6341

d.none of these answers are correct