Period Cash Flow 1 45,000 2 40,000 3 35,000 4 30,000 5 25,000 1. If your required rate of return is 9% per year, calculate BOTH the present value and the future value of the above stream of cash flows? 2. Now, suppose that you are offered another investment that is identical, except that the cash flows are reversed (i.e., cash flow 1 is 25 000, cash flow 2 is 30 000, cash flow 3 is 35 000, cash flow 4 is 40 000 and cash flow 5 is 45 000). Is this worth more or less than the original investment? Why? 3. Period Cash Flow Cash Flow 0 (100,000) (100,000) 1 2 3 4 5 IRR If you paid R100 000 for the original investment, what average annual rate of return would you earn? What return would you earn on the reversed cash flow? Use the IRR function. Still assuming that your required return is 9%, would you be willing to purchase either of these investments? Explain why or why not