Question 1. (4 marks) Annuities are one of the most used of the valuation formulas in finance. There are 7 characteristics or factors that we need to look for when determining the correct formula to use. Name 5 of the characteristics that you need to look for and explain their importance when solving a problem. Question 2. (4 marks) It has been stated that 'Time has value.' What does this mean when we are evaluating a series of cash flows? Problems Please note: show the formula you are using and your work! Use and show time lines. Marks will be assigned for the presentation of the time lines and the relevant information. Problem 1. (12 marks) Your friend is talking to you about one of their investments. They stated that they invested in I- Can't-Believe-It a few years ago. Yesterday, your friend received a cheque from the investment for $5,000. According to the company's annual report and forecast, the company expects the amount of the cash flow to increase or grow at 15 percent for the next 5 years and then to grow at 2 percent forever. (Include a time line that contains the relevant information for each problem.) a. If you require a 15 percent return on your investment, what is the value of this investment today? (4 marks) b. If interest rates are 15 percent per year and the first cash flow of $5,000 occurs three months from now, what is this investment worth today? (4 marks) c. If the first cash flow of $5,000 occurs today, what is the value of the investment today? (4 marks)