Q1. You would like to buy out a Caf (business) which will offer you $20,000 of free cash flow every year. However, you wonder what a reasonable value of the Caf. Currently, the market offers APR of 6% (per year). You plan to run the Caf for the next 10 years. There is no value left in the Caf when you close it at the end of 10th year. How much the value (PV) of the Caf is?

Q2. You have only $300,000 cash and plan to retire now. You will invest $300,000 to IT ETF which will generate 8% APR (per year). During your retirement, you are expected to spend $27,000 per year. How long (years) you are able to receive $27,000 per year?

Q3. After consulting with a financial advisor (CFP or CFA), you decided to retire in 15 years. Your financial advisor suggested you to invest $500 (per month) on an index ETF (mimicking the performance of S&P500 index). The index ETF is expected APR of 6% (per year). How much is your total saving at the end of 15th year (12*15 months)? Q4. You register a saving plan offering $200,000 at the end of 20 years. The saving plan promises 6% APR (per year). How much do you need to deposit per year in the saving plan?

Q4. You register a saving plan offering $200,000 at the end of 20 years. The saving plan promises 6% APR (per year). How much do you need to deposit per year in the saving plan?

Q5. You have a preferred stock paying $3 dividend. Its required rate of return is 10%. How much is the preferred stock? (Hint: the value of preferred stock is estimated with PV of perpetuity). Q6. You just signed on a borrowing contract in which you borrow $30000 for 4 years. Your borrowing rate (APR) is 12%. Please complete Amortized loan table (Amortization loan table).

Q6. You just signed on a borrowing contract in which you borrow $30000 for 4 years. Your borrowing rate (APR) is 12%. Please complete Amortized loan table (Amortization loan table).