1. A project will produce cash inflows of $1,750 a year for four years. The project initially costs $10,600 to get started. In year five, the project will be closed and as a result should produce a cash inflow of $8,500. What is the net present value of this project if the required rate of return is 13.75%?

2. What is the net present value of a project that has an initial cash outflow of $-11,500, at time 0, and the following cash flows for years 1-4? The required return is 10.0%.

                                                Year     Cash Flows

                                                   1          $-1,500

                                                   2          $11,000

                                                   3          $11,000

                                                   4          $11,000

3. What would you pay for a stock which just paid a dividend of $1.70 if the expected dividend growth rate is 4% and you require a 10% return on your investment?