Question 1. Critically evaluate various approaches to the financial management. (Points 2)

Question 2. What are the differences between fund flow and cash flow? (Points 2)

Question 3. (a) What is the present value of a perpetuity of $100 per year if the appropriate discount rate is 7%? If interest rates in general were to double and the appropriate discount rate rose to 14%, what would happen to the present value of the perpetuity? (Points 2)

(b) Your company is planning to borrow $1 million on a 5-year, 15%, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal? (Points 2)