Please answer them correctly. Here are 2 short problems. Pleasesolve all 2 problems. I would really appreciate your effort.Thanks.
1). You are buying a sofa. You will pay $200today and make three consecutive annual payments of $300 in thefuture. The real rate of return is 17.0 percent, and the expectedinflation rate is 4 percent. What is the actual price of the sofa?(Do not round factor values. Round final answer to 2decimal places, e.g. 15.25.)
Actual Price $________?
2). Sunland, Inc., is considering investing ina new production line for eye drops. Other than investing in theequipment, the company needs to increase its cash and cashequivalents by $10,000, increase the level of inventory by $27,000,increase accounts receivable by $25,000, and increase accountspayable by $5,000 at the beginning of the project. Sunland willrecover these changes in working capital at the end of the project8 years later. Assume the appropriate discount rate is 9 percent.What are the present values of the relevant investment cash flows?(Do not round intermediate calculations. Round answerto 2 decimal places, e.g. 15.25.)
Present Value $__________?
