Problem 1: According to the five Foundations of Finance Principles, explain the difference between Cash flow is what matters and Money has a Time Value (20 points) Problem 2: George received 12,345 $ for his services as a consultant to the mayors office of his hometown of Boston. He has invested his money into an account paying 3,98% annual interest and left the account in his will to the city of Boston on the condition that the city could not collect any money from the account for 200 years. How much money will the city receive in 200 years from Georges generosity? Picture the problem, decide on a solution strategy, solve and analyze. (20 points) Problem 3: You just received a bonus of 5,000 $. Answer these questions Picture the problem, decide on a solution strategy, solve and analyze. a) Calculate the future value of 5,000 $ given that it will be held in the bank for 5 years and earn an annual interest rate of 6%. (10 points) b) Recalculate part a using a compound period that is 1)semiannual and 2) bimonthly.(5 points) c) Recalculate part a using a time horizon of 12 years at an annual interest rate of 6%. (5 points) Problem 4 : From the following price data: a) compute the annual rates of return for W and K companies. Picture the problem, decide on a solution strategy, solve and analyze. (15 points) Time W K 1 10 $ 30 $ 2 12 28 3 11 32 4 13 35 b) How would you interpret the meaning of the annual rates of return? (5 points) Problem 5: AXX has a beta of 0.795. If the expected market return is 10.5% and the risk-free rate is 3.5 %, what is the appropriate required return of AXX using CAPM (Capital Asset Market Model) ?