- An investment is expected to pay nothing for 5 years, then will pay $14,000 per year for 4 years. If your required rate of return is 6%, what is the maximum you should be willing to pay for this investment?
- What is the NPV for an investment with an initial outlay now of $476, and expected cash inflows of $187, $216, and $337 at the end of years one through three, respectively? The discount rate is 10.3%.
- Cheryl wants to have $4,300 in spending money to take on a trip to Disney World in three years. How much must she deposit now in a savings account that pays 4% per year to have the money she needs in three years?
- You have provided your friend with a service worth RM8,500. Your friend offers you the following cash flow instead of paying RM8,500 today. Should you accept his offer if your opportunity cost is 8 percent?

5. Year | 6. Cash Flow |

7. 1 | 8. RM4,000 |

9. 2 | 10. RM3,000 |

11. 3 | 12. RM2,000 |

13. 4 | 14. RM1,000 |