A. What is the present value of a perpetual stream of cash flows that pays $50,000 at the end of year one and then grows at a rate of 3% per year indefinitely? The rate of interest used to discount the cash flows is 9%.

b.How much do you have to deposit today so that beginning 11 years from now you can withdraw $14,000 a year for the next years (periods 11 through 18) plus an additional amount of $28,000 in the last year (period 18 )? Assume an interest rate of 5 percent.