What is the payback period of the project

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1. The Joe Bryce Sports Agency is planning to borrow invest $50 million in an expansion project. The firm has a 12% cost of capital. If the duration of the project is 6 years, and the expected CFAT are $19 million a year, what is the payback period of the project?

a. 1.63 years

b. 2.63 years

c. 3.63 years

d. 7.63 years

e. none of the above

2. Forecasting Interest Rates On May 23, 20XX, the existing or current (spot) one-year, two-year, three-year, and four-year zero-coupon Treasury security rates were as follows: 1R1 = 5.25%, 1R2 = 5.75%, 1R3 = 6.25%, 1R4 = 6.45% Using the unbiased expectations theory, what is the one-year forward rate on zero-coupon Treasury bonds for year four as of May 23, 20XX

7.05%

6.45%

5.925%

22.00%

Reference no: EM131905701

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