Sea Masters Co. has identified an investment project with the following cash flows for the next 5 years. If the discount rate is 13.8percent, the present value of these cash flows is $__________. Round it to two decimal places without the $ sign,e.g.,23456.34

Year Cash Flows 1 $21,000 2 26,000 3 39,000 4 48,000 5 78,000

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Question 2 (2 points)

The present value of the following cash flow stream is $6,724 when discounted at 5 percent annually. Thevalue of the missing cash flow is $_______ . (Do not include the dollar sign ($). Round youranswer to the nearest whole dollar amount. (e.g., 32))

Year Cash Flow 1 $1,500 2 2,000 3 ? 4 2,500

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Question 3 (2 points)

Mary wants to retire in 30 years with $1 million in her retirement account. To that end she decides to save money every year in a savings plan that pays 10.6 percent annually. Her first contribution will occur at the end of the year (one year from today). She needs to save $__________ each year to the savings plan. Round it to two decimal places and do not include the $ sign, e.g., 1234.56.

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Question 4 (2 points)

Suppose an investment that pays $47,000 per year forever. If the required return on this investment is 14 percent, how much are you willing to pay for the investment today? (Do not include the dollar sign ($), and round your answer to two decimal places.(e.g., 123456.45)

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Question 5 (2 points)

Suppose you are going to receive $13,000 per year for 11 years at the end of each year; thus you receive the first payment one year from today. Compute the present value of the cash flows if the appropriate interest rate is 6 percent. Round it two decimal places, and do not include the $ sign, e.g., 123456.78.

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Question 1 (2 points)

What is the future value of a 17-year ordinary annuity with annual payments of $61,000, evaluated at a 11.9 percent interest rate? Round it to two decimal places, and do not include the $ sign, e.g., 123456.54

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Your credit card says it charges18.9% APR with daily compounding. What real annual rate are they charging? That is, find the effective annual rate (EAR). Express in percentage but do not include the % sign, and round it to twodecimal places, e.g., 9.45 (for .0945 or 9.45%)

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You are buying a new home, and you have negotiated a 15-year mortgage loan with a local bank for an amount $336,000 at 3.76 percent APR with monthly compounding. What would your monthly payment be? Round it to two decimal place (cents), e.g., 234.56.

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Suppose you plan to retire in 40 years. If you make 10 annual investments of $1,000 into your retirement account for the first 10 years, and then no more contributions to the account for the remaining 30 years. If the retirement account earns a fixed 7% annual interest, how much will you have at your retirement? Round it to two decimal placeswithout the $ sign, e.g., 1234567.89.

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Mark is planning for his daughter's education. She will be attending a college in 11 years. The college expenses are estimated to be $66,000 for a 4-year college. If he can earn 9 percent APR with monthly compoundingon a college savings plan, how much does he have to invest every monthfor the next 11 years? Round it to two decimal places and do not include the $ sign, e.g., 1234.56.

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