Reference no: EM131320438
1. Use the following information to calculate your company's expected return
state probability return
boom 20% .40
normal 60% 1.11
recession 20% -.17
2. you have invested stocks j and m. from the following information determine your beta for your portfolio expected amount of
return investment beta
stock j .10 120000 1.2
stock m .08 300000 .79
3. you have invested 30% of your portfolio into Jacob Inc. 405 into belle co. and 30% into Edward resources. what is the expected return of your portfolio if Jacob, belle and Edward have expected returns of .05, .19, .13 respectfully?
4. the covariance of the returns between willow stock and sky diamond stock is .0970. the variance of willow is .1290 and the variance of sky diamond is .1200. what is the correlation coefficient between the returns of the two stocks?
5. a project has the following cash flows
0 1 2 3
500 120 200 310
what is the projects NVP if the interest rate is 6%
6. Christopher electronics has bought new machinery for 5,000,000. the expected is to result in additional cash flows of 1210000over the next 7 years. what is the payback period for this project? there acceptance period is 5 years.
|
New video game he has developed
: A young software genius is selling the rights to a new video game he has developed. Two companies have offered him contracts. The first contract offers $10,000 at the end of each year for the next five years, and then $20,000 per year for the followi..
|
|
Considering new three year expansion project
: Quad Enterprises is considering a new three year expansion project that requires an initial fixed asset investment of 2.67 million. The fixed asset falls into the 3 year MACRS class. The project is estimated to generate $2,070,000 in annual sales, wi..
|
|
Estimate what change in interest rates next year
: Suppose that a bank has $5 billion of one-year loans and $35 billion of five-year loans. These are financed by $35 billion of one-year deposits and $5 billion of five-year deposits. The bank has equity totaling $2 billion and its return on equity is ..
|
|
Current assets financed by the long-term liabilities
: The following information relates to Rodeo Corporation. Current assets $70,000 Current liabilities $52,500 Long-term assets $210,000 Long-term liabilities $140,000 Based on this information, the amount of the current assets financed by the long-term ..
|
|
Determine your beta for your portfolio expected amount
: You have invested 30% of your portfolio into Jacob Inc. 405 into belle co. and 30% into Edward resources. what is the expected return of your portfolio if Jacob, belle and Edward have expected returns of .05, .19, .13 respectfully? you have invested ..
|
|
What is the projects year zero net cash flow
: Quad Enterprises is considering a new three year expansion project that requires an initial fixed asset investment of 2.85 million. The fixed asset will be depreciated straight-line to zero over its three year tax life. If the tax rate is 34 percent ..
|
|
New project available that requires an initial investment
: Dorman Industries has a new project available that requires an initial investment of $5.1 million. The project will provide unlevered cash flows of $735,000 per year for the next 20 years. The company will finance the project with a debt-to-value rat..
|
|
What is the required return on the firm levered equity
: Mojito Mint Company has a debt–equity ratio of .30. The required return on the company’s unlevered equity is 13 percent, and the pretax cost of the firm’s debt is 7.8 percent. Sales revenue for the company is expected to remain stable indefinitely at..
|
|
Realistic assessment of the challenges facing new venture
: Write a business plan for one of the two following ventures. Option A. Expanding a one-store operation to a two-store operation Assume you currently run a small retailing business in the lobby of a large office building. A realistic assessment of the..
|