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1 Pat invests in a limited partnership and pays $150,000 for a 10% interest

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1 Pat invests in a limited partnership and pays $150,000 for a 10% interest. He receives a K-1 with his loss at $80,000. How much of his loss is suspended under the at-risk rules?

a. $0.

b. $8,000.

c. $15,000.

d. $80,000.

2 

Assume that a f?rm will generate the following cash flows. (Ignore liquidation value and initial investment.) Also assume that the interest rate you would receive on an alternative investment of equal risk is 10%

End of year 1: $110

End of year 2: $242

End of year 3: $133.10

What is the value of the firm based on these cash flows?