Your required return is 15%. Should you accept a project with the following cash flows?                         Year                                 0                1                2                3                         Cash Flow                     -$25           $10            $10            $25

According to the CAPM, what is the expected return on asset A if it has a beta of 2.5, the expected market return is 7%, and the T-bill rate is 1%?

In order to help you through college, your parents just deposited $23,000 into a bank account paying 4% interest. Starting tomorrow, you plan to withdraw equal amounts from the account at the beginning of each of the next four years. What is the MOST you can withdraw annually?

In 1889, Vincent Van Gogh’s painting, “Sunflowers”, sold for $125. One hundred years later it sold for $36 million. Had the painting been purchased by your great-grandfather and passed on to you, what annual return on investment would your family have earned on the painting?

The optimal expense allocation presented in the Personal Finance lecture states that

If you can consistently make abnormal profits using historical information, this would indicate that the weak form of market efficiency holds.

Suppose that your firm has a cost of equity of 18% and a cost of debt of 5%. If the target debt/equity ratio is 0.60, and the tax rate is 30%, what is the firm’s weighted average cost of capital (WACC)?

A firm has expected EBIT of $650, debt with a market value of $2,000 paying an 7.50% annual coupon rate, and an un-leveraged cost of capital of 12%. If the tax rate is 34%, what is the value of the leveraged firm, according to M&M’s proposition I with taxes?

If we assume that the annual return on common stocks are normally distributed, then approximately 99% of the returns will fall within the range _______, if the average historical return is 13.0% with a standard deviation of 20.2%.

If you can consistently make abnormal profits using publicly available information, this would indicate that the semi-strong form of market efficiency holds.