QUESTION 3 20 MARKS Paul just has identified three investment opportunities that he is considering. One is investment A that is expected to pay N$800 a year for three years, followed by N$1 000 per year for four years. It will pay N$2 000 at the end of the eighth year. Investment B is expected to pay N$3 000 at the end of the fourth year followed by N$400 indefinitely. Investment C will pay N$1 000 at the end of year 2, N$500 at the end of Year 3, followed by N$400 at the end of year 4, which will grow by 2% indefinitely. Sam has a required return of 10% on all his investments. REQUIRED: MARKS 1.1 Calculate the maximum amount of money that Sam would pay for investment A at the start of year 3? 5 1.2 Calculate the maximum amount of money that Sam would be willing to pay for investment A, today? 5 1.3 Calculate the present value of Investment B as at Year 0. 1.4 Calculate the market value of Investment C today. TOTAL MARKS 552 20