1.

Which alternative do you prefer Php 4,500 cash or Php 1,200 each year for 4
years? Assume a discount rate of 10% annuity.
If I am the selling company or an entity:
In this particular scenario, I would gladly choose Php 1,200 each year for 4 years
with 10% discount annuity rate because I will be dealing with my money’s both
present and future value. First of all, we all know that the discount rate is the rate
of interest or anticipated rate of return on other assets over the same time period
as the payments. This has a direct impact on the value of an annuity and the
amount of money I will be getting from a purchasing business, company, or an
individual. The standard discount rate is between 9 and 18 percent. They can be
higher, but most of the time they are around the center which in this case is 10%.
The larger the present value, the lower the discount rate and the lower the
discount rate, the higher the present value. I have chosen this alternative over the
other one which is the cash because of its practicality because if we’re going to
look at it carefully, when I get 4,500 pesos cash it will be the end of money flow
that will be all of it. However, with my chosen alternative, it is clear that I can get
money with an interest on it. It is a favorable decision, right? because I will be
getting money with an interest for 4 consecutive years and not just that because
as I get money my cash will continue to flow and in emergency situations, I
know that I have money to expect. Thus, I know that the value of money may
change over a period of time so be it in a positive or negative note then I can say
that I will still benefit from it.

Let’s have an illustration:

1200 (1.10)^1 = 1320
1200 (1.10)^2 = 1452
1200 (1.10)^3 = 1597.2
1200 (1.10)^4 = 1756.92
Total Future Value = Php 6,126.12
Php 6,126.12 > Php 4,500 therefore, alternative B is the best choice than
alternative A.
Now, if I am the purchasing individual or company:
I will now choose 4,500 cash but I will also consider payable which is 1200 for 4
years. I consider 4,500 cash so that I can take advantage of a lower price or the
face value of the 4,500 cash. On the other hand, I may also consider payable of
1200 to save my budget from sudden emergency issues, right? Just like how
businesses chose to have more payables than to pay in cash just in one go.
2. Some investment analysts argue that very low interest rates on some long -
term bonds make them risky investments.
Why do interest rates and prices of financial securities move in opposite
directions?
This particular question relates to the law of supply and demand just like what
we’ve always encounter in any economics subjects.
For instance, let’s have an example, treasuries, which are regarded as one of the
safest investments available. The fact that so much money is flowing into these
assets raises their price. It's just a matter of supply and demand. Prices tend to
rise when demand exceeds supply. Prices and yields fluctuate in the other way
when it comes to bonds. Bond yields fall as bond prices rise, and vice versa. As a
result, when anxiety rises and money pours into bonds, prices rise and yields
fall. As a result, when interest rates rise, bond prices decrease, causing pain to
bond investors, particularly those who remain in bond funds. To put things in
perspective, when bonds lose value, it's typically not as awful as when the stock
market drops. You may also take some precautions to shield yourself from rising
interest rates.
Further example:
 If investors can invest the same Php 1,000 and purchase a bond that pays a
higher interest rate, why would they pay Php 1,000 for your lower-interest bond?
In this case, the value of your bond would be less than Php 1,000. Hence, your
bond would be trading at a discount. Conversely, if interest rates were to fall
after your purchase, the value of your bond would rise because investors cannot
buy a new issue bond with a coupon as high as yours. In this case, your bond
would be worth more than Php 1,000. Hence, it would trade at a premium. The
bottom line is this. The market value of a bond will fluctuate as interest rates rise
and fall. 
3. Is a peso today worth more than a peso next year if the annual rate of inflation
is zero?
Well, we all intuitively understand that receiving 1,000 pesos today is
preferable to receiving 1,000 pesos in a year's time. In just one year, a lot of things
may happen, things that might impact (typically negatively) the worth of our
money. The most apparent (and predictable) thing that can happen is that the
costs of most products and services would rise, lowering the buying power of
our 1,000; we all understand what inflation is and that it is a reality of life. As a
result, a peso now is worth more than a peso tomorrow, simply because prices of
most items tend to rise over time, and 1,000 pesos will most likely be able to buy
more fuel, chicken, or beer today than they would be able to buy a year from
now. Though in this case of zero inflation rate, this is very favorable with
average consumers and we can say that it can be a peso today is less than a peso
next year but take note that we are not just pertaining with several months but a
year. We are not 100% sure that this zero inflation rate will last for as long as a
year and we must keep in mind most especially that we, financial students, that
there's also a genuine risk that if we become caught in a time of ultra-low
inflation/deflation, all of deflation's issues will become more visible, restricting
regular economic growth. This is a boomerang effect with a great impact when it
hits. So, I therefore conclude that Peso today is indeed worth more than a peso
next year.