1.If Mahsa instead invests an additional $5,000 in new equipment and upgrades for the bakery each year, the bakery will

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1.If Mahsa instead invests an additional $5,000 in new equipment
and upgrades for the bakery each year, the bakery will remain
operational and generate net cash flows of $15,000 into perpetuity.
Given the same initial investment of $80,000 and discount rate of
15%, calculate the NPV of opening the bakery. Should Mahsa quit her
job and start the bakery?
2. Mary is saving for a $30,000 down payment on a house. She can
earn 6% interest on her savings and sets aside $15,000 today. How
long will it take for these savings to grow enough to make the down
payment?
3. He buys a scratch-off ticket every day and today he hits
it big with a $100,000 winning ticket. But when he turns in his
ticket, he’s informed of the fine print that states the $100,000 is
payable in annual instalments of $10,000 per year over the next 10
years. If he wants a lump sum today, he will only get $85,000. If
the interest rate is 5%, is it better for him to take the ten
$10,000 annual instalments or the $85,000 lump sum?