1. The required return on a project with conventional cash flows is 15%, the projects return on assets is 17%, and the projects IRR is 12%.
2. What is the effective annual interest rate(EAR) if a bank charged you 10 percent annually (APR) with quarterly compounding?
3. What is the present value of the following 9-year annuities with discount rates of 5%?
a. The annuity grows at 3% per year with the first payment of $10,000 in one year.
c. The annuity grows at -5% per year with the first payment of $10,000 in three years.