What is discounted payback period for these cash flows

Assignment Help Financial Management

Reference no: EM132059725

1. An investment project has annual cash inflows of $5,800, $6,900, $7,700, and $9,000, and a discount rate of 14 percent.

Required:

What is the discounted payback period for these cash flows if the initial cost is $9,000? (Do not round your intermediate calculations.)

a. 1.24 years

b. 1.74 years

c. 2.49 years

d. 3.48 years

e. 0.74 years

2. The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 18 percent a year for the next 4 years and then decreasing the growth rate to 3 percent per year. The company just paid its annual dividend in the amount of $2.50 per share. What is the current value of one share of this stock if the required rate of return is 8.00 percent?

a. $99.85

b. $88.43

c. $85.93

d. $73.39

e. $102.35

Reference no: EM132059725

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