HRTM 421 Chapter 7 Practice Problems 1. What is the PV of $1,325,000 lump sum investment to be received in 5 years assuming a 5% discount rate? 2. What is the FV of $5,000 to be invested each year for 10 years assuming an interest rate of 5%? 3. What is the FV of a $5,000 lump sum investment at an interest rate of 6% for 20 years? 4. What is the present value of the following stream of cash flow to be received at the end of each year assuming a discount rate of 8.5% assuming no initial investment? Year 1: $0 Year 2: $150,000 Year 3: $225,000 5. What is the payback period for a restaurant that invests $500,000 in expanded seating and gains $150,000 annually in profits? 6. You have an investment proposal that invites you to invest $100,000 each for 10 years with the first payment due today. If the sponsor offers 9% interest what will the investment be worth in 10 years