S AND PROBLEMS 1. connec Present Value and Multiple Cash Flows [LO1] McCann Co. has identified an investment project with the following cash flows. If the discount rate is 10 percent, what is the present value of these cash flows? What is the present value at 18 per- BASIC cent? At 24 percent? Questions 1-2 Year 1 2 Cash Flow $ 530 690 875 3 4 1,090 2. Present Value and Multiple Cash Flows [LO1] Investment X offers to pay you $4,200 per year for eight years, whereas Investment Y offers to pay you $6,100 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 percent? If the discount rate is 15 percent? 3. Future Value and Multiple Cash Flows [LOI] Fuente, Inc., has identified an in- vestment project with the following cash flows. If the discount rate is 8 percent, what is the future value of these cash flows in Year 4? What is the future value at a discount rate of 11 percent? At 24 percent? Year 1 Cash Flow 2 3 4 $1,075 1.210 1,340 1,420 4. Calculating Annuity Present Value [LO1] An investment offers $4,350 per year for 15 years, with the first payment occurring one year from now. If the required re- turn is 6 percent, what is the value of the investment? What would the value be if the payments occurred for 40 years? For 75 years? Forever? and in exchange pay 11. Calculating Perpetuity Values [LO1] In the previous problem, suppose a sales asso- ciate told you the policy costs $800,000. At what interest rate would this be a fair deal? of the following cases