Question 1. You have been offered a unique investment opportunity. If you invest $10,000 today, you will receive $500 one year from now, $1500 two years from now, and $10,000 ten years from now.
A. What is the NPV of the opportunity if the cost of capital is 6% per year? Should you take the opportunity?
B. What is the NPV of the opportunity if the cost of capital is 2% per year? Should you take it now?
Question 2. You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $5000 and will be posted for one year. You expect that it will generate additional free cash flow of $500 per month. What is the payback period?
Question 3. You are choosing between two projects, but can only take one. The cash flows for the projects are given in the following table:
0 1 2 3 4
A -50 25 20 20 15
B -100 20 40 50 60
A. What are the IRRs of the two projects?
B. If your discount rate is 5%, what are the NPVs of the two projects?
C. Why do IRR and NPV rank the two projects differently?
Question 4. You buy 100 shares of Tidepool Co. for $40 each and 200 shares of Madfish, Inc., for $15 each. What are the weights in your portfolio?
Question 5. You are analyzing a stock that has a beta of 1.2. The risk-free rate is 5% and you estimate the market risk premium to be 6%. If you expect the stock to have a return of 11% over the next year, should you buy it? Why or why not?
Professional homework help features
Our Experience
However the complexity of your assignment, we have the right professionals to carry out your specific task. ACME homework is a company that does homework help writing services for students who need homework help. We only hire super-skilled academic experts to write your projects. Our years of experience allows us to provide students with homework writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How our professional homework help writing services work
You first have to fill in an order form. In case you need any clarifications regarding the form, feel free to reach out for further guidance. To fill in the form, include basic informaion regarding your order that is topic, subject, number of pages required as well as any other relevant information that will be of help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download