MULTIPLE CHOICE. Choose the one alternative that best answers the question. 1) What is the present value of $1,500 payments received at the end of each year for the next 10 years? Assume an interest rate of 6.525%. A) $10,770.64 B) $978.75 C) $11,473.43 D) $15,000.00 2) You are given two choices of investments, Investment A and Investment B. Both investments have the same future cash flows. Investment A has a discount rate of 4%, and Investment B has a discount rate of 5%. Which of the following is true? A) The present value of cash flows in Investment A is equal to the present value of cash flows in Investment B. B) The present value of cash flows in Investment A is lower than the present value of cash flows in Investment B. C) The present value of cash flows in Investment A is higher than the present value of cash flows in Investment B D) No comparison can be made-we need to know the cash flows to calculate the present value. 3) Tom's Shipping had sales last year of $6,000. The cost of goods sold was $2,500, general and administrative expenses were $500, interest expenses were $500, and depreciation was $1,000. Assume the firm's tax rate is 35%. The earnings before interest and tax is . Net income is The firm's cash flow is A) 3000, 1975, 975 . B) 2000,975,975 C) 3000, 1975, 1975 D) 2000,975, 1975 4) What is the market price of a share of stock for a firm with 100,000 shares outstanding, a book value of equity of $3,000,000, and a market-to-book ratio of 3? A) $90 B) $30 C) $10 D) $105