1. Your company has a project available with the following cash flows: Year Cash Flow 0 −$80,800 1 21,650 2 25,300 3 31,100 4 26,150 5 20,100 If the required return is 15 percent, should the project be accepted based on the IRR?

2. A friend wants to borrow money from you. He states that he will pay you $3,700 every 6 months for 12 years with the first payment exactly 5 years from today. The interest rate is 4.7 percent compounded semiannually. What is the value of the payments today?

3. A house is selling for $500,000 but you want to wait 6 months to buy it. Standard Deviation is 20% and bond yield is 5%. What is the max fee you will pay for that option?