McNutt Co$.$ has identified an investment project with the following cash flows. If the

discount rate is $8$ percent, what is the present value of these cash flows? What is the

present value at $16$ percent? At $21$ percent?

An investment offers $$25,000$ per year for $12$ years, with the first payment occurring one

year from now. If the required return is $3\mathrm{.}15$ percent, what is the value of the investment?

What would the value be if the payments occurred for $20$ years? For $50$ years? Forever?

If you put up $$450,000$ today in exchange for a $5\mathrm{.}375$ percent, $30-$year annuity, what will

the annual cash flow be$?$

Find the EAR in each of the following cases:

You would like to start saving for your retirement and are trying to figure out how much

to save. You estimate that you will need $$350,000$ per year for the $35$ years you'll be

retired. In addition, you'd like to have an additional $$30,000$ in your third year of

retirement to buy a boat. Assume that you plan to save an equal amount of money every

year, starting next year for the $40$ years you will be working $($save in years $1-40,$

withdraw in years $41-75,$ buy boat in year $44)$ How much do you need to save each year

if the interest rate is $9\%?$

After deciding to buy a new car, you can either lease the car or purchase it on a four$-$year

loan. The car you wish to buy costs $$38,000.$ The dealer has a special leasing

arrangement where you pay $$3,800$ today and $$475$ per month for the next three years. If

you purchase the car, you will pay it off in monthly payments over the next three years at

an APR of $6$ percent. You believe you will be able to sell the car for $$26,000$ in three

years. Should you buy or lease the car? What break$-$even resale price in three years would

make you indifferent between buying and leasing?