1) (i) The ABC University is given a gift of $400,000 for construction of a science building.

The University receives 8% on the money for 9 years then the rate drops to 7%. If the building is constructed 25 years after the gift was received, how much is in the fund at that time?

(ii) An investment costing $50,000 promises an after tax cash flow of $18,000 per year for 6 years. a. Find the investment's net present value at a 15 percent discount rate. b. Find the investment's internal rate of return. 2) (i) A city s population is expected to increase at a rate of 4.95% per year for the next ten years. If the current population is 322,000, what is the expected population at the end of the next ten years?

(ii) Determine the net present value for a project that costs $104,000 and would yield after-tax cash flows of $16,000 the first year, $18,000 the second year, $21,000 the third year, $23,000 the fourth year, $27,000 the fifth year, and $33,000 the sixth year. Your firm's cost of capital is 12.00%.

3) (i) An investor deposited $10,000 in a savings account paying 5% converted quarterly. At the end of 5 years what is the value of the account?

(ii) Determine the internal rate of return for a project that costs $180,532.00 and is expected to yield after-tax cash flows of $25,000 per year for the first five years, $33,000 per year for the next five years, and $46,000 per year for the following five years.

4) (i) What principal is needed to accumulate $3000 in 8 years at 4.5% interest compounded semiannually?

(ii) Equipment A has a cost of Rs75, 000 and net cash flow of Rs20, 000 per year for 6 years. A substitute equipment B would cost Rs50, 000 and generate net cash flow of Rs14, 000 per year for 6 years. The required rate of return of both equipments is 11 per cent. Calculate the IRR and NPV for the equipments. Which equipment should be accepted and why? 5) (i) An investor s IRA grows with $2,000 annual deposits and earns 9% for 30 years. What is the future value of the annuity? What is the present value of a certificate of deposit with a maturity value of $1,000 due in 3 years, if money is worth 6% compounded semi-annually?

(ii) Determine the net present value for a project that costs $253,494.00 and is expected to Yield after-tax cash flows of $29,000 per year for the first ten years, $37,000 per year for the next ten years, and $50,000 per year for the following ten years. Your firm's cost of capital is 12.00%.

6) (i) $200 monthly deposits are made into a mutual fund that earns 12.25% compounded monthly. What is the value of the account at the end of 7.25 years?

(ii) Determine the internal rate of return for a project that costs $78,000 and would yield after-tax cash flows of $12,000 the first year, $14,000 the second year, $17,000 the third year, $19,000 the fourth year, $23,000 the fifth year, and $29,000 the sixth year.