The net present value of this replacement project

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Reference no: EM131328335

The Net Present Value (NPV) of this replacement project is:

A. $1,095,644

B. $1,288,993

C. $1,482,342

D. $1,546,792

2. IBM stock currently sells for 49 dollars per share. Over 12 months the price will either go up by 11.5 percent or down by -7.0 percent. The risk-free rate of interest is 4.5 percent continuously compounded. If you are short one call option with strike price 51 and maturity 12 months, what is the future value in 12 months of a delta-neutral portfolio?

a. 21.908

b. 18.764

c. 20.533

d. 18.273

Reference no: EM131328335

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