QUESTION 14 When we express the value of a cash flow or series of cash flows in terms of dollars today, we call it the of the investment. If we express it in terms of dollars in the future, we call it the ordinary annuity; annuity due O present value; future value O discount factor; discount rate O future value; present value QUESTION 15 You are considering purchasing a new home. You will need to borrow $250,000 to purchase the home. A mortgage company offers you a 15 year fixed rate mortgage (180 months) at 3% APR. If you borrow the money from this mortgage company, your monthly mortgage payment will be closest to: $2,535 O $1,726.45 O $7,536.85 O $1,660 QUESTION 16 You are saving for retirement. To live comfortably, you decide that you will need $2.5 million dollars by the time you are 65. If today is your 30th birthday, and you decide, starting today, and on every birthday up to and including your 65th birthday, that you will deposit the same amount into your savings account. Assuming the interest rate is 5%, the amount that you must set aside each year on your birthday is closest to: O $26,086 $26,260 O $71,430 O $27,680 QUESTION 3 Consider the following timeline detailing a stream of cash flows: Date 0 1 2 3 4 ? $5000 $6000 $7000 $8000 Cash flow If the current market rate of interest is 8%, then the present value of this stream of cash flows is closest to: O S22,871 OS21,211 O $24,074 O $26.000 QUESTION 4 If the current rate of interest is 8% APR, then the future value of an investment that pays $250 per quarter and lasts 20 years is closest to: O $20,000 O S48,443 O $18,519 O S9936 QUESTION 5 Rearden Metal needs to order a new blast furnace that will be delivered in one year. The $1,000,000 price for the blast furnace is due in one year when the new fumace is installed. The blast furnace manufacturer offers Rearden Metal a discount of $60,000 if they pay for the furnace now. If the interest rate is 7%, then the NPV of paying for the furnace now is closest to: O ($5,421) O $5,421 O ($6,729) O S6,729