Solve the following problems from your textbook, and submit the answers and the work you did to obtain the answers in a Word or Excel document: 1. Problem 9.1 from page 323, Chapter 9 2. Problem 9.4 from page 324, Chapter 9 3. Problem 9.6 from page 324, Chapter 9 4. Problem 9.7 (a. and b. only) from page 324, Chapter 9 5. Problem 9.9 from page 325, Chapter 9

9.1 Find the values for a lump sum assume annual compounding: The future value of $500 invested at 8% for 1 year The future value of $500 invested at %8 for five years The present value of $500 to be received in one year when the opportunity cost rate is 8% Same as above to be receive in five years when the opportunity cost rate is 8% 9.4 Find the following values assuming a regular, or ordinary, annuity: The present value of $400 per year for ten years and 10% The future value of $400 for ten years at 10% The present value of $200 per year for five years at 5% The future value of $200 for five years at 5% 9.6 Consider the following uneven cash flow stream: Year Cash flow 1 $ 0 2 250 3 400 4 500 5 600 6 600 What is the present (Year 0) value if the opportunity cost (discount) rate is 10%? Add an outflow (or cost) of $1,000 at year 0. What is the present value (or net present value) of the stream? 9.7 Consider another cash flow stream: Year Cash flow 1 $2,000 2 2,000 3 0 4 1,500 5 2,500 6 4,000 What is the present (year 0) value of the cash flow stream if the opportunity cost rate is 10%? What is the future (year 5) value of the cash flow stream if the cash flows are invested in an account that pays 10% annually? What cash flow today (year 0), in lieu of the $2,000 cash flow, would be needed to accumulate $20,000 cash flow at the end of year 5? (Assume that the cash flows for year 1 through 5 remain the same). Time value analysis involves either discounting or compounding cash flows. Many healthcare financial mgmt decisionssuch as bond refunding, capital investment, and lease/ vs buy involve discounting projected future cash flows. What factors must executives consider when choosing a discount rate to apply to forecasted cash flows? 9.9 Assume that you just won 35 million in the Florida lottery, and the state will pay you 20 annual payments of $1.75 million each beginning immediately. If the rate of return on securities of similar risk to 6%, what is the present value of your winnings