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You are choosing between two projects. The cash flows for the project are given in the following table ($ million) :
Project Year 0 Year 1 Year 2 Year 3 Year 4
A) -$51 $25 $21 $21 $14
B) -$101 $18 $42 $48 $62
A. What are the IRRS of the two projects?
B. If your discount rate is 4.9%, what are the NPVs of the two projects?
C. Why do IRR and NPV rank the two projects differently?
The current price of a non-dividend paying stock is $50. Use a two-step tree to value a European call option on the stock with a strike price of $48 that expires in 6 months. Each step is 3 months, the risk free rate is 5% per annum, and the volatili..
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Discuss the approach your organisation used to manage its new initiatives-especially new product developments and Discuss how your organisation evaluates projects within its overall portfolio.
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Tugurt Inc.'s stock has a 60% chance of producing a 20% return, a 30% chance of producing a 10% return, and a 10% chance of producing a -10% return. What is the firm's expected rate of return?
Total revenues and net income for 2011 for Lake Corporation is $3,500,000 and $280,000 respectively. Lake Corporation has had 400,000 common shares of stock outstanding for all of 2011. The selling price of smith lake corporation common stock on Dece..
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