A firm with a 10.5 percent cost of capital is considering a project for this year’s capital budget.  The project’s expected after-tax cash flows are as follows: Year: 0 1 2 3 4 Cash flow: -$11,000 $5,000 $5,300 $5,200 $5,000 Calculate the project’s discounted payback period.

A firm with a 10 percent cost of capital is evaluating two projects for this year’s capital budget.  The projects’ expected after-tax cash flows are as follows: Year: 0 1 2 3 Project X: -$15,000 $6,200 $8,300 $5,700 Project Y: -$9,000 $3,700 $3,200 $3,300 If Projects X and Y are mutually exclusive, which one(s) should the firm adopt?

Spelling, punctuation, and accent mark count toward grading.  Misspelled, wrong tense, or wrong form of verbal conjugation (- full points worth).  Missing article or preposition (-1/2 point). Missing accents from the words you have been exposed to during the chapter, punctuation–periods, capital letters, upside-down exclamation or question marks–If needed (-1/4 points).   Accent Marks Please write me a short message, in parenthesis, next to the word that needs it, for instance: You need to write  ¡Mi mamá comprará el juguete mañana para Iván! You will write it like (upside-down exclamation mark) Mi mama (accent on the 2nd a) comprara (accent on the second a) el juguete manana (tilde over the 1st n) para Ivan (accent on a)! Notice that when there is more than one repeated vowel/consonant, I used more details on which vowel/consonant the accent mark was placed–mamá, mañana, etc. Unlike the name “Ivan,” which has one accentuated vowel.   Directions Fill in the blanks with the Spanish translation in the present tense of the English verb in parenthesis.    Mi apartamento ______ (to be) muy cerca de la universidad.  

Li & Associates’ common stock currently trades at $55 a share.  It is expected to pay an annual dividend of $1.65 a share at the end of the year (D1 = $1.65), and the constant growth rate is 8.7 percent a year.  What is the company’s cost of common equity if all of its equity comes from retained earnings?

Directions Read the question and select your best answer to the question given.    Question The two best ways to communicate with your professor are:

Directions You are asked to answer the question given. Please choose the best answer to the question.   According to the syllabus, how many sessions/days can I miss from the class before I can be potentially dropped by my instructor?

Directions True or False   If I have technical problems with any platform database, such as a computer crashing or Proctorio requiring an access code, I should contact my instructor immediately.

Leslie Industries is considering the following independent projects for the coming year: Project RequiredInvestment ExpectedRate of Return Risk X $8 million 11.5% High Y   8 million   6.5% Average Z   3 million   7.0% Low Leslie’s WACC is 8 percent, but it adjusts for risk by adding 2 percent to the WACC for high-risk projects and subtracting 2 percent for low-risk projects.  Which project(s) should Leslie accept assuming it faces no capital constraints?

Loyd & Associates’ common stock currently trades at $65 a share.  It is expected to pay an annual dividend of $3.58 a share at the end of the year (D1 = $3.58), and the constant growth rate is 5.7 percent a year.  What is the company’s cost of common equity if all of its equity comes from retained earnings?

If a firm’s beta is 1.2, the risk-free rate is 4.5%, and the expected return on the market is 9.5%, what will be the firm’s cost of equity using the CAPM approach?