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Question 1 5 pts The face value for a zero coupon bond is $100,000, and the zero matures in 12 years. Suppose that the appropriate discount rate is 3% per year with annual compounding What is the present value of the bond's face value? Equivalently, what price are we willing to pay for this bond? Question 2 7 pts Your company is considering investing in Project X. Your analysts estimate that this project will increase your company's net cash rows by $80.686 in year 1.5182,587 in year 2, and $106,257 in year 3. For convenience, they treat these cash flows as occurring at the end of the respective years. Your analysts decided that the appropriate discount rate for this project is 6% per year, compounded annually. What is the present value of the cash flows expected from Project X Question 3 7 pts You are a credit manager for Second Bank of Terlingua, Your bank is considering a loan to Artichoke aproperty developer in Terlingua. The structure of the loan is such that Arti would agree to pay back $20 million per year for 5 years, with the first payment in one year. Given the risk of Arti's company, you think that the appropriate Interest rate should be 2296 per year, compounded annually. Given this rate and the structure of the loan, how much should your bank tend to Arte Question 4 7 pts Myrna Loy has just won a lottery. The payout is $76,511 a year for 20 years. Myma will receive the first payment in one year, if the appropriate discount rate is 7per year with annual compounding. What is the present value of Myrna's winning

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