Jays is a diamond mining company in South Africa. Their supply is depleting at a constant rate of 3% per year. This past year, Jays received $300 million from its mines, but next year (one year from today), they expect to receive only $291 million.

a. If you required an annual return of 11.55%, what would you pay to acquire Jays -- assuming that the cash flows will continue forever (even though they are getting smaller each year)?

b. Assuming that there are no changes in any of the parameters above, what would the investment in Jays be worth at the end of 5 years from now?

c. Determine your annual rate of return if you purchased Jays (all of it) today at the price specified in part a, received all of the (decreasing) cash flows at times one through five, and then sold your investment at the end of the 5th year for the value determined in part b.

d. Once again assume that you would purchase Jays today, its cash flows would continue forever, and your required rate of return is 11.55%. What growth rate in cash flows would cause Jays to be worth $2,328 million?

Please answer all 4 parts and show work