Question

Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Totals: |

Project A | |||||

$ (200,000.00) | $ 25,000.00 | $ 50,000.00 | $ 75,000.00 | $ 100,000.00 | $ 250,000.00 |

Project B | |||||

$ (200,000.00) | $ 50,000.00 | $ 75,000.00 | $ 50,000.00 | $ 75,000.00 | $ 250,000.00 |

Project C | |||||

$ (200,000.00) | $ 75,000.00 | $ 75,000.00 | $ 50,000.00 | $ 50,000.00 | $ 250,000.00 |

1. If I decide to borrow my 200K required investment at a rate of 10%, which project would be the best option?

A. Project A |
||

B. Project B |
||

C. Project C |
||

D. None of these |

2. Christine bought 100 shares of AT&T stock at $32 per share on January 1st, and sold it at $31 in December. The stock paid an annual dividend of $2.02 in that period. What is Christine's total return?

A. -3.125% |
||

B. 3.29% |
||

C. 3.19% |
||

D. 6.3% |

3. The Dividend Discount Model is one of the best valuation tools for analyzing a stock because:

A. It is not a good tool since it is difficult to find the dividend growth rates |
||

B. It is the most popular method to value stocks of any company |
||

C. It can easily value a company's stock for any company that pays dividends |
||

D. It is not one of the best valuation tools since not all stocks pay dividends and few consistently grow their dividends. |

4. Interest Rates are sometimes referred to as:

A. Yield |
||

B. Future Value |
||

C. Compounding rate |
||

D. None of these |

Answer #1

1)

Year 0
Year 1
Year 2
Year 3
Year 4
TOTAL
Project A
$ (200,000.00)
$ 25,000.00
$ 50,000.00
$ 75,000.00
$ 100,000.00
$ 250,000.00
Project B
$ (200,000.00)
$ 50,000.00
$ 75,000.00
$ 50,000.00
$ 75,000.00
$ 250,000.00
Project C
$ (200,000.00)
$ 75,000.00
$ 75,000.00
$ 50,000.00
$ 50,000.00
$ 250,000.00
1. You have $200,000 to invest in the above three projects with
corresponding cash flows. The discount rate is 8%. Of the three
projects, which, according to...

1. Nancy will need $500,000 in 20 years to buy a house on the
water in Ft. Lauderdale Florida. In order to reach her goal, she
decides to invest in a real estate stock that has paid a consistent
annual dividend of 14%. How much does Jenny have to invest in the
fund each month in order to achieve her goal of 500,000?
A. Need more information to answer this question
B. 589.00
C. 2375.00
D. 384.27
2. The Dividend...

Consider the following two projects:
Project
Year 0
Year 1
Year 2
Year 3
Year 4
Discount
Rate (%)
Cash Flow
Cash Flow
Cash Flow
Cash Flow
Cash Flow
A
-90
40
50
60
---
3.0
B
-90
30
30
30
30
3.0
(a) The internal rate of return (IRR) for project
A is %. (round to two
decimals)
(b) The internal rate of return (IRR) for project
B is %. (round to two
decimals)
(c) The NPV for project...

Giasgow company nas tne foiiowing Tinanciai data for project X
(3-year project): Year Year 1 Year 2 Year 3 CF -10,000 5,000 4,000
4,000 The company's capital structure is distributed equally
between debt, preferred stock and common stock. It has also the
following information: 1- After tax cost of debt: 5.8%. Tax rate:
40% 2- Preferred stocks are selling at $65 per share and pay a
dividend of $8 per share 3- Common stocks are selling at $40 per
share,...

Year, Price, Dividend
0 $49 -
1 52.20 .75
2 57 .80
3 54 .90
4 60 .95
A stock has the following year-end prices and dividends: ^
Part A: What was the average return for this stock over the four
years it was held? Part B: What was the standard deviation and
variance of this stock over the 4-year period?

You have 3 projects with the following cash flows:
Year: 0 1 2 3 4
Project 1: -$ 148 $ 20 $ 42 $ 60 $ 81
Project 2: -826 0 0 6,994 -6,510
Project 3: 21 40 58 78 -44
a. For which of these projects is the IRR rule reliable?
b. Estimate the IRR for each project (to the nearest 1 %). c.
What is the NPV of each project if the cost of capital is 5 %?...

Your company is considering the following projects:
0
1
2
3
4
Project 1
-10,000
0
0
10,000
5,000
Project 2
-7,000
0
4,000
4,000
4,000
Project 3
-3,000
0
5,000
If the expansion budget is limited at $12 million, which
project/projects should the company take?
a.
Project 3
b.
Projects 2 & 3
c.
Project 1 and 3
d.
Project 2
I am not given a discount rate for this question.

Given：
Year
0
1
2
3
4
Project A
$-350
$50
$100
$150
$200
Project B
$-250
$125
$100
$75
$50
Hurdle rate = 10%,
Use incremental IRR analysis to decide
whether you should take project A instead of project B.

Here are the expected cash flows for three projects:
Cash Flows (dollars)
Project
Year:
0
1
2
3
4
A
−
6,300
+
1,325
+
1,325
+
3,650
0
B
−
2,300
0
+
2,300
+
2,650
+
3,650
C
−
6,300
+
1,325
+
1,325
+
3,650
+
5,650
a. What is the payback period on each of the
projects?
b. If you use a cutoff period of 2 years, which
projects would you accept?
Project A
Project B...

PH.3 (LO 2, 3) On December 31, 2021, the end of its first year
of operations, Botani Associates owned the following securities
that are held as long-term investments. Unrealized gain of
$3,300.
Common Stock Shares Cost
C Co. 1,000 $48,000
D Co. 5,000 36,000
E Co. 1,200 24,000
On this date, the total fair value of the securities was equal
to its cost. The securities are not held for influence or control
over the investees. In 2022, the following transactions...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 2 minutes ago

asked 2 minutes ago

asked 3 minutes ago

asked 3 minutes ago

asked 5 minutes ago

asked 6 minutes ago

asked 8 minutes ago

asked 9 minutes ago

asked 10 minutes ago

asked 10 minutes ago

asked 11 minutes ago

asked 11 minutes ago