You want to purchase a business with the following cash flows. How much would you pay for this business today? You need a 14% return to make this deal work. You will receive the cash at the end of the year?

First year $150,000 Second year $175,000 Third year $225,000 Forth year $275,000

What type of a problem is this? _______________

How much would you pay for this business today assuming you need an 18% return to make this deal work? (Same problem as above.)

What type of a problem is this? _______________