Question 4 a. The stock market provides an annual return of 8.4%. A risky project costs 35,000 but provides 20,000 cash flow for two years. Would you invest in the project? Why/Why Not? b. Assume in order to undertake this project the firm needs to undertake project 2 that costs 12,000 but provides a one-year cash flow of 13,500 and project 3 that costs 8,000 but provides three years of cash flow of 3,000. Will the firm still take on the project and how much will firm value and increase? a c. Your client has been given a trust fund valued at 1.25 million. He cannot access the money until he turns 65 years old, which is in 25 years. At that time, he can withdraw 24,000 per month If the trust fund is invested at a 4.5 percent rate, compounded monthly, how many months will it last your client once he starts to withdraw the money? d. You are comparing houses in two towns in Sheffield. You have 100,000 to put as a down payment, and 30-year mortgage rates are at 8% Location 1 Location 2 Price of the house 400,000 300,000 Annual Property Tax 6,000 12,000 i. Estimate the total payments (mortgage and property taxes) you would have on each house. Which one is less expensive? Marks) ii. Are mortgage payments and property taxes directly comparable? Why or why not? iii. If property taxes are expected to grow 3% a year forever, which house is less expensive