A stock had the following annual returns: -6.11% , 19.56% , -21.74% , and -1.86%. Compute the following for the stock: Expected Return (Please write your answer as a percentage (e.g. .1234 should be written as 12.34)): [1]% Variance (Please write your answer with 4 decimal places): [2] Standard Deviation (Please write your answers as a percentage (e.g. .1234 should be written as 12.34)): [3]%

Your corporation is considering investing in a new product line.  The annual revenues (sales) for the new product line are expected to be  $151,232.00  with variable costs equal to 50% of these sales.  In addition annual fixed costs associated with this new product line are expected to be  $40,653.00 .  The old equipment currently has no market value. The new equipment cost  $89,229.00 .  The new equipment will be depreciated to zero using straight-line depreciation for the three-year life of the project. At the end of the project the equipment is expected to have a salvage value of  $38,316.00 .  An increase in net working capital of  $65,487.00  is also required for the life of the project.  The corporation has a beta of  1.128 , a tax rate of  41.63% , and a target capital structure consisting of  33.26%  equity and  66.74%  debt.  Treasury securities have a yield of  2.58%  and the expected return on the market is  12.76% . In addition, the company currently has outstanding bonds that have a yield to maturity of  5.34%. For answers that are dollar amounts, please round to the nearest two decimal places. For answers that are a percentage, please be sure to enter your answer as a percentage (for example, .1234 becomes 12.34%). What is the total initial cash outflow? (show as negative number): $[1] What are the estimated annual operating cash flows? $[2] What is the terminal cash flow? $[3] What is the corporations cost of equity? $[4] What is the WACC? [5]% What is the NPV for this project? $[6]

A firm has a WACC of 8.67% and is deciding between two mutually exclusive projects.  Project A has an initial investment of $64.04. The additional cash flows for project A are: year 1 = $17.73, year 2 = $36.79, year 3 = $63.83. Project B has an initial investment of $73.34. The cash flows for project B are: year 1 = $51.29, year 2 = $43.24, year 3 = $22.61. Calculate the following:  Payback Period for Project A (round your answer to the nearest 2 decimal places): [1] Payback Period for Project B (round your answer to the nearest 2 decimal places): [2] NPV for Project A: $[3] NPV for Project B: $[4]

Your corporation is considering investing in a new product line.  The annual revenues (sales) for the new product line are expected to be  $152,820.00  with variable costs equal to 50% of these sales.  In addition annual fixed costs associated with this new product line are expected to be  $57,244.00 .  The old equipment currently has no market value. The new equipment cost  $88,617.00 .  The new equipment will be depreciated to zero using straight-line depreciation for the three-year life of the project. At the end of the project the equipment is expected to have a salvage value of  $13,297.00 .  An increase in net working capital of  $56,318.00  is also required for the life of the project.  The corporation has a beta of  1.746 , a tax rate of  37.22% , and a target capital structure consisting of  58.42%  equity and  41.58%  debt.  Treasury securities have a yield of  2.29%  and the expected return on the market is  9.98% . In addition, the company currently has outstanding bonds that have a yield to maturity of  8.16%. For answers that are dollar amounts, please round to the nearest two decimal places. For answers that are a percentage, please be sure to enter your answer as a percentage (for example, .1234 becomes 12.34%). What is the total initial cash outflow? (show as negative number): $[1] What are the estimated annual operating cash flows? $[2] What is the terminal cash flow? $[3] What is the corporations cost of equity? $[4] What is the WACC? [5]% What is the NPV for this project? $[6]

Your corporation is considering investing in a new product line.  The annual revenues (sales) for the new product line are expected to be  $164,226.00  with variable costs equal to 50% of these sales.  In addition annual fixed costs associated with this new product line are expected to be  $57,491.00 .  The old equipment currently has no market value. The new equipment cost  $82,123.00 .  The new equipment will be depreciated to zero using straight-line depreciation for the three-year life of the project. At the end of the project the equipment is expected to have a salvage value of  $14,924.00 .  An increase in net working capital of  $57,466.00  is also required for the life of the project.  The corporation has a beta of  1.662 , a tax rate of  34.89% , and a target capital structure consisting of  51.13%  equity and  48.87%  debt.  Treasury securities have a yield of  1.55%  and the expected return on the market is  7.00% . In addition, the company currently has outstanding bonds that have a yield to maturity of  8.34%. For answers that are dollar amounts, please round to the nearest two decimal places. For answers that are a percentage, please be sure to enter your answer as a percentage (for example, .1234 becomes 12.34%). What is the total initial cash outflow? (show as negative number): $[1] What are the estimated annual operating cash flows? $[2] What is the terminal cash flow? $[3] What is the corporations cost of equity? $[4] What is the WACC? [5]% What is the NPV for this project? $[6]

Suppose a firm has 34.10 million shares of common stock outstanding at a price of $46.49 per share.  The firm also has 371000.00 bonds outstanding with a current price of $1,072.00. The outstanding bonds have yield to maturity 8.21%. The firm’s common stock beta is 2.296 and the corporate tax rate is 36.00%. The expected market return is 10.62% and the T-bill rate is 1.86%. Compute the following. Please write your final answer as a percentage (e.g. .1234 should be written as 12.34). Weight of Equity of the firm: [1]% Weight of Debt of the firm: [2]% Cost of Equity of the firm: [3]% After Tax Cost of Debt of the firm: [4]% WACC for the Firm: [5]%

Which of the following defines the internal rate of return for a project?

A firm has a WACC of 14.26% and is deciding between two mutually exclusive projects.  Project A has an initial investment of $62.96. The additional cash flows for project A are: year 1 = $19.39, year 2 = $35.88, year 3 = $65.96. Project B has an initial investment of $71.44. The cash flows for project B are: year 1 = $53.44, year 2 = $37.15, year 3 = $32.93. Calculate the following: Payback Period for Project A (round your answer to the nearest 2 decimal places): [1] Payback Period for Project B (round your answer to the nearest 2 decimal places): [2] NPV for Project A: $[3] NPV for Project B: $[4]

Your corporation is considering investing in a new product line.  The annual revenues (sales) for the new product line are expected to be  $268,332.00  with variable costs equal to 50% of these sales.  In addition annual fixed costs associated with this new product line are expected to be  $42,301.00 .  The old equipment currently has no market value. The new equipment cost  $61,737.00 .  The new equipment will be depreciated to zero using straight-line depreciation for the three-year life of the project. At the end of the project the equipment is expected to have a salvage value of  $12,427.00 .  An increase in net working capital of  $61,298.00  is also required for the life of the project.  The corporation has a beta of  1.078 , a tax rate of  25.56% , and a target capital structure consisting of  47.66%  equity and  52.34%  debt.  Treasury securities have a yield of  2.81%  and the expected return on the market is  9.70% . In addition, the company currently has outstanding bonds that have a yield to maturity of  4.50%. For answers that are dollar amounts, please round to the nearest two decimal places. For answers that are a percentage, please be sure to enter your answer as a percentage (for example, .1234 becomes 12.34%). What is the total initial cash outflow? (show as negative number): $[1] What are the estimated annual operating cash flows? $[2] What is the terminal cash flow? $[3] What is the corporations cost of equity? $[4] What is the WACC? [5]% What is the NPV for this project? $[6]

If a firm applies its overall cost of capital to all its proposed projects, then the divisions within the firm will tend to ______.