1. You are thinking of investing in a project that will pay you $100,000 6 years from now, and another $100,000 11 years from now. You think the right discount rate for the project is 9.2%. What is the maximum you should be willing to pay for this investment?
2. An investment is expected to produce $2,869 at the end of each year for the next 6 years. Other investments of similar riskiness available to you are yielding 11.2 percent return. What is the maximum you should be willing to pay for this investment?