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Consider a project with the following cash flows -100, 230 and -134 at time 0, 1 and 2, respectively. Obtain the IRR(s) of the project.
A. 10% and 20%
B. 10%
C. 20%
D. IRR does not exist
Consider a project with the following cash flows -100, 230 and -134 at time 0, 1 and 2, respectively. Obtain the NPI (Net Profitability Index) of the project if the cost of capital is 10%.
A. 0.0078
B. 0.0084
C. -0.0078
D. -0.0084
A contractor departed from the specifications at a number of points in a contract to build a house. The cost to put the house in the condition called for by the contract was approximately $14,000. The contractor was sued for $50,000 for breach of con..
The market capitalization rate for Admiral Motors Company is 10%. Its expected ROE is 15% and its expected EPS is $7. If the firm’s plowback ratio is 50%. Calculate the growth rate. What will be its P/E ratio?
A college student spends $12,000 (end of the year) in year 1, 15,000 in year 2, 16,000 in year 3, and 18,000 in year 4 in order to acquire a college degree. The increase in potential salary (compared to a high school graduate) is expected to be 500 a..
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Mr. Smith, Esq. purchased a new house for $90,000. He paid $30,000 upfront and agreed to pay the rest over the next 20 years in 20 equal annual payments that include principal payments plus 11 percent compound interest on the unpaid balance. What wil..
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You have $40,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 15 percent and Stock Y with an expected return of 6 percent. Required: If your goal is to create a portfolio with an expected return of 11.9 percent,..
Suppose 1-year T-bills currently yield 6.00% and the future inflation rate is expected to be constant at 2.95% per year. What is the real risk-free rate of return, r*?
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