If $$8000$ is invested in a certain business at the start of the year, the investor will receive

$$2400$ at the end of each of the next four years.

a$)$ What type of stream of cash flow is these $$2400$ s$?$

b$)$ What is the present value of this business opportunity if the interest rate is $6\%$ per year? $($Show

your work.$)$

c$)$ If the investor receives $$2400$ at the beginning of each of four years, what type of stream of

cash flow is these $$2400$ s and what is the present value of this business opportunity? $($Show

your work.$)$

d$)$ How much is the difference between $\text{'}$c$\text{'}$ and $\text{'}$b$\text{'}$ and why?

Hint: First find the present value of the annual payments the investor will receive and then

compare it with the initial investment $($or subtract the initial investment from the present value of

the annual payments.$).$