Questions (4-1) Define each of the following terms: a. PV; 1; INT; FV : PVA : FVA : PMT;M; INOM b. Opportunity cost rate c. Annuity; lump-sum payment: cash flow; uneven cash flow stream d. Ordinary (or deferred) annuity; annuity due c. Perpetuity, consol f. Outflow, inflow; time line; terminal value g. Compounding; discounting h. Annual, semiannual, quarterly, monthly, and daily compounding i. Effective annual rate (EAR or EFF%); nominal (quoted) interest rate: APR, periodic rate j. Amortization schedule; principal versus interest component of a payment; amortized loan (4-2) What is an opportunity cost rate? How is this rate used in discounted cash flow analysis, and where is it shown on a time line? Is the opportunity rate a single number that is used to evaluate all potential investments? (4-3) An annuity is defined as a series of payments of a fixed amount for a specific number of periods. Thus, $100 a year for 10 years is an annuity, but $100 in Year 1, $200 in Year 2, and $400 in Years 3 through 10 does not constitute an annuity. However, the entire series does contain an annuity. Is this statement true or false? (4-4) If a fimm's earnings per share grew from $1 to $2 over a 10-year period, the total growth would be 100%, but the annual growth rate would be less than 10%. True or false? Explain. (4-5) Would you rather have a savings account that pays 5% interest compounded semiannually or one that pays 5% interest compounded daily? Explain