QUESTION $9$

You bought a new sofa today from Tabs Sofas. You will pay $$2,480$ to Tabs Sofas today, receive a cash rebate of $$470$ from Tabs Sofas in $1$ year, pay $$4,360$ fto Tabs Sofas in $3$ years, and receive a cash rebate of $$990$ from Tabs Sofas in $5$ years. If the discount rate is $19\mathrm{.}46$ percent, then what is the present value of the cash flows associated with this transaction? Note: the correct answer is less than zero.

$-$$$3,796\mathrm{.}36($plus or minus $$5\mathrm{.}00)$

$$3,677\mathrm{.}18($plus or minus $$5\mathrm{.}00)$

$-$$$3,888\mathrm{.}20($plus or minus $$5\mathrm{.}00)$

None of the other alternatives are within $$5\mathrm{.}00$ of the correct answer

$-$$$4,237\mathrm{.}15($plus or minus $$5\mathrm{.}00)$

QUESTION $10$

A store is expected to make annual cash flows forever. The cost of capital for the store is $9\mathrm{.}60$ percent. The next annual cash flow is expected in one year from today and all subsequent cash flows are expected to grow annually by $2\mathrm{.}90$ percent. What is the value of the store if the cash flow in $5$ years from today is expected to be $$27,400?$

$$418,016($plus or minus $$10\mathrm{.}00)$

$$471,267($plus or minus $$10\mathrm{.}00)$

None of the other alternatives are within $$10\mathrm{.}00$ of the correct answer

$$364\mathrm{.}766($plus or minus $$10\mathrm{.}00)$

$$444,642($plus or minus $$10\mathrm{.}00)$

$q,$

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