• Q1) Mike is expecting an inheritance of $5 million in four years. If he had the money today, he could earn interest at an annual rate of 5.25 percent. What is the present value of this inheritance?

• Q2) Mid Corp. is expecting annual cash flows of $100,000, $200,000, $250,000, and $300,000 over the next four years. If it uses a discount rate of 6.25 percent, what is the present value of this cash flow stream?

• Q3) You bought a corporate bond for $850 today. In five years the bond will mature and you will receive $1,000. What is the rate of return on this bond?

Answer rating: 100% (QA)

Q1 The present value of Mikes 5 million inheritance considering a 525 annual intere... View the full answer