1. Explain the impact that loanable funds theory has on interest rates.
2. An investment offers a perpetual stream of $4,000 annual payments. The first payment will be received in 8 years. The interest rate is 4.5% per year. What is the value of this investment today?
3. Kitchen Enterprises has $44,000 in cash, $13,000 in inventory, $28,000 balance due to creditors, and $38,000 balance due from customers. What is the amount of owners' equity?