1. What is the present value of the following cash flow stream, discounted at a rate of 12.0%? [Type in your answer to the nearest dollar]. Years: 0 1 2 3 4 Cash Flows: $0 $1,500 $3,000 $4,500 $6,000
2. What’s the present value of a perpetuity that pays $225 per year, if the appropriate interest rate is 5%? [Type in your answer in dollars, to the nearest dollar].
3. Suppose you borrowed $12,000 at a rate of 9.0% and must repay it in four equal installments at the end of each of the next four years. How large would your payments be? [Type in your answer in dollars, to the nearest penny].