Section 4 - (25 Marks) - Show Your Work 1. (10 marks) A project has the following cash flows at the end of each year. Year Cash Flow 1 $5,000 2 ($5,000) 3 $5,000 a) (4 Marks) What is the future value of the cash flows at the end of year 3 at a 5% discount rate? b) (3 Marks) If the project also requires an upfront investment of $5,000 what is the PV of the cash flows? c) (3 Marks) Based on above, should this project be accepted? Why or why not? 2. (8 marks) Upon graduating from the MKPD program your new job will provide you with a base salary of $60,000 per year and the company will also contribute and additional $500 with every monthly paycheque into a pension. Your required return for all investment is 6% per year. a) (3 Marks) If you plan on leaving this company in 5 years, how much is this new job worth today? b) (3 Marks) How long will you have to stay at the company until your pension is worth $50,000? c) (2 Marks) If you were immortal and could stay at the company forever, how much would your pension be worth today