Discussion Questions 1. Explain what the time value of money means and why it would be important to a business owner: 2. What are the three elements of time value of money and why are each of them important? 3. How is risk irvolvod in time value of money? 4. What are the pros and cons of NPV? 5. What are the pros and cons of IRP? 1. If a buyiness has a $500,000 outstanding loan at a 12% interest rate and pays a 6.75% annual dividend on it of $2,000,000 of equity capital, caiculate the cost of capital. 2. To pay the startup expenses on her business, Brenda has withdrewn $10,000 from her savings account earning 2$ interest and charsed $15,000 on her credit card where the annual interest rate is 21%. What is Brenda's cost of capital? What is the minimum discount rate Brenda should consider for a net present value calculation? 3. If a buniness has a current cost of capital of 6% and plans on borrowing $100,000 at 8% for an investment opportunity and typically adds 5% to its minimum discount fate for risk, what discount rate should be used? 4. What is the future value of 510,000 invested for a year in a bank account paying 7ac interest? 5. What is the present value of $100,000 recelved next year if the discount rate is 6% ? 6. What is the present value of $100.000 recelved in three years if the discount rate is 12% ? 7. What is the net present value of 550,000 recelved next year if the discount mate is 5$5 and investment amount is 545,000 ? 6. What is the present value of $200,$500, and $1,500 received over the next three years at a 103 discount rate? Assurning the initial investment amount is $1.200, what is the NPV? 9. Calculate the IRR on cash flows of $200,5500, and $1.500 received over the next threo years if the initial investment is $1.200. 10. Considering your answer to 58 and $9, which is the most accurate and/or reliable