Question 1: An annuity pays $100 at the end of each period for 10 periods. Set up the CFs in an Excel spreadsheet as follows: 0 1 2 3 4 5 6 100 100 100 100 100 100 7 8 100 100 9 100 10 100 For these cash flows the appropriate discount rate is 6%. What is the PV of this series of cash flows? Solve the problem using the following approaches: a. Estimate the PV as the sum of the PVs of each of the CFs. b. Use the annuity formula. c. Use the excel built-in function PV. Question 2: An annuity pays $200 at the end of each period for 10 periods. Set up the CFs in an Excel spreadsheet as for Question 1. The current value of this stream of CFs is $1,544. What is the implied discount rate? Solve the problem using the following approaches: a. Use trial and error or Goal Seek in Excel (tab Data/What-if-Analysis). b. Use the excel built-in function RATE. Question 3: An investment yields expected future cash flows of $21.00, $34.00, $40.00, $33.00, and $17.00 in periods 1 through 5, respectively. Set up the CFs in an Excel spreadsheet as for Question 1. For these expected cash flows, the appropriate discount rate is 8.0%. What is the value of this stream of CFs? a. Estimate the PV as the sum of the PVs of each of the CFs. b. Can we use the annuity formula? c. Use the excel built-in function PV