1. You are considering two projects with the following cash flows:
Project Y Project X
Year 1 $9,500 $6,000
Year 2 $9,000 $6,900
Year 3 $6,900 $9,000
Year 4 $6,000 $9,500
Which one of the following statements is true concerning the two projects given a positive discount rate?
A. Both projects have the same present value at time zero.
B. Project X has a higher present value at time zero than project Y
C. Project Y has both a higher present value and a higher future value than project X.
D. Both projects have the same future value at the end of year 4.
2. What is the effective annual rate for a stated APR of 12.3 percent with weekly compounding?
A. 13.02 percent
B. 12.98 percent
C. 12.84 percent
D. 13.07 percent