1. What constant payment for the next 10 years (starting 1 yearfrom now, 10 payments) would be equivalent to receiving $900 everyother year starting 10 years from now. Assume the annual cost ofcapital is 7%. 2. Suppose you own two assets with the following payouts. (1)$450 at the end of every year starting 1 year from now. The annualcost of capital for these cash flows is 13%. (2) $900 one year fromnow and a cash flow that is 3% larger than the prior cash flowevery year thereafter. The annual cost of capital for these cashflows is 8%. What is the weighted average cost of capital of thistwo asset portfolio? (enter your answer as a percent, e.g. 2.51. Donot include the “%” sign). 3. Suppose that you will need to save $600000 over the nexttwenty years to retire comfortably. What constant annual payment(20 payments) will you need to make to save this amount if the youcan earn 7% annually? . . .
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