QUESTIUNS -1 What is an opportunity cost? How is this concept used in TVM analysis, and where is it shown on a time line? Is a single number used in all situations? Explain. Explain whether the following statement is true or false: $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 con- stitute an annuity. However, the second series contains an annuity. If a firm's earnings per share grew from $1 to $2 over a 10-year period, the total growth would be 100 percent, but the annual growth rate would be less than 10 percent. True or false? Explain. (Hint: If you aren't sure, plug in some numbers and check it out.) Would you rather have a savings account that pays 5 percent interest compounded semi- annually or one that pays 5 percent interest compounded daily? Explain. Questions 2-1 What is an opportunity cost? How is this concept used in TVM analysis, and where is it shown on a timeline? Is a single number used in all situations? Explain. 7