1. The interest rate is 9% compounded annually. Consider the following cash flow.
Year 0: (-$45)
Year 1: $0
Year 2: $87
Year 3: $142
Year 4: $192
Year 5: $252
Find the value of A --where you receive A 6 times (years 0-5)--that is economically equivalent to the preceding cash flow. HINT: This is different than the normal equal payment series because you are also receiving A in year 0.
2. Explain why Free Cash Flow is the most useful metrics for investors?