What is the internal rate of return (IRR) of this project given the following cash flows? Year CF 0 -$2,200 1 $ 900 2 $ 800 3 $ 600 4 $ 700 5 $1,090 Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box. 1 points QUESTION 2 What is the modified internal rate of return (MIRR) of this project? Assume that the required rate is 14% Year CF 0 -$22,000 1 $ 8,700 2 $ 1,400 3 $ 4,300 4 $ 1,750 5 $ 4,600 Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box. 1 points QUESTION 3 A 12-year project is expected to generate annual sales of $270,081, variable costs of $32,642, and fixed costs of $39,056. The annual depreciation is $12,153 and the tax rate is 33 percent. What is the annual operating cash flow? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. 1 points QUESTION 4 What is the NPV of this project if the required rate is 7%? Year CF 0 -$1,312 1 $743 2 $1,757 3 $2,148 Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. 1 points QUESTION 5 One year ago, you puchased 185 shares of ABC stock for $40.5 per share. During the year, you received a dividend of $6.79 per share. Today, you sold all your shares for $57.84. What are the percentage return on your investment? Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box. 1 points QUESTION 6 ABC Inc. is considering an investment of $1,644 million with after-tax cash inflows of $231 million per year for six years and an additional after-tax salvage value of 34 million in Year 6. The required rate of return is 16%. What is the investment’s Profitability Index (PI)? Enter your answer rounded off to two decimal points. 1 points QUESTION 7 A project has an initial requirement of $77,167 for equipment. The equipment will be depreciated to a zero book value over the 5-year life of the project. The investment in net working capital will be $12,826. All of the net working capital will be recouped at the end of the 5 years. The equipment will have an estimated salvage value of $17,008. The annual operating cash flow is $38,680. The cost of capital is 14 percent. What is the project’s net present value if the tax rate is 21 percent? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. 1 points QUESTION 8 You have invested $75,253 portfolio in three securities. The three securities comprise of the risk-free asset, Stock A, and Stock B. The beta of stock A is 1.9 while the beta of stock B is 0.5. 29% of the portfolio is invested in the risk-free security. What is the dollar amount invested in stock B if the beta of the portfolio is 1.2? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. 1 points QUESTION 9 ABC Company is considering an investment that will cost the company $576 at time=0. The after-tax cash flows are expected to be $105 each year for 9 years. What is the payback period? Enter your answer rounded off to two decimal points. 1 points QUESTION 10 Based on the following information, what is the portfolio beta? Stock Value Beta A $44,167 0.62 B $22,576 0.66 C $45,002 1.54 D $15,557 3.49 Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box. 1 points QUESTION 11 The risk-free rate is 5.5%, the market risk premium is 7.4%, and the stock’s beta is 0.41. What is the cost of common stock (Ke)? Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box. 1 points QUESTION 12 Over the past six years, a stock had annual returns of 10 percent, 5 percent, 7 percent, 8 percent, 2 percent, and -11 percent, respectively. What is the standard deviation of these returns? Enter your answer as a percentage rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box. 1 points QUESTION 13 Suppose the nominal rate is 17.13% and the inflation rate is 3.77%. Solve for the real rate. Use the Fisher Effect formula. Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box. 1 points QUESTION 14 What is the Profitability Index (PI) of this project if the required rate is 19%? Year CF 0 -$3,923 1 $765 2 $1,238 3 $1,108 4 $573 5 $883 Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box. 1 points QUESTION 15 What is the project’s initial investment outlay based on the following information: The machinery could be purchased for $39,481. Shipping and installation costs would cost another $9,957. The project would require an initial investment in net working capital of $9,407. The company’s tax rate is 30%. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. 1 points QUESTION 16 You have a $56,803 portfolio that consists of $17,622 invested in Stock A, $11,282 invested in Stock B, $9,731 invested in Stock C, and the remainder in Stock D. The portfolio has a return of 21.2 percent. The return for Stock A is 3.1 percent, for Stock B is 26.9 percent, and for Stock C is 5.5 percent. What is the return for Stock D? Enter your answer as a percentage rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box.z 1 points QUESTION 17 Five years ago, ABC Company invested $51,967 million in a machinery. The investment in net working capital was $7,977 which would be recovered at the end of the project. Today, ABC Company is selling the machinery for $17,066 million. The book value of the machinery is $24,827 million. The tax rate is 28 percent. The operating cash flows in Year 5 are 6,303. What are the project’s Year 5 cash flows? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. 1 points QUESTION 18 ABC Company is considering a new project. The project is expected to generate annual sales of $65,476, variable costs of $18,689, and fixed costs of $9,650. The depreciation expense each year is $10,884 and the tax rate is 25 percent. What is the annual operating cash flow? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. 1 points QUESTION 19 ABC Company purchased a new machinery 4 years ago for $61,651. Today, it is selling this equipment for $18,382. What is the after-tax cash flow from this sale if the tax rate is 30 percent? The MACRS allowance percentages are as follows, commencing with year one: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. 1 points QUESTION 20 ABC purchased $78,299 of equipment 2 years ago. The equipment is 7-year MACRS property. What is the current book value of the equipment? The MACRS allowance percentages are as follows, starting with Year 1: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. 1 points QUESTION 21 The beta of a risk-free asset is: 1 1.5 0 infinite 2 1 points QUESTION 22 A sunk cost is: a cost that is recovered at the start of the project. a cost that has already been incurred. a cost that is recovered at the end of the project. depreciated to zero balance over the life of the project. an opportunity cost. 1 points QUESTION 23 Based on the following cash flows, calculate the payback period. Year CF 0 -$1,306 1 $394 2 $268 3 $58 4 $363 5 $1,054 Enter your answer rounded off to two decimal points. 1 points QUESTION 24 An investor puts $40,000 in a risk-free asset and $20,000 in the market portfolio. Compute the beta of his portfolio. 2 0.50 0.33 0.67 1 1 points QUESTION 25 A project requires $32,564 of equipment that is classified as a 7-year property. What is the depreciation expense in Year 5 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box. 1 points QUESTION 26 If a security’s intrinsic value is higher than its market value, the security appears to be _________________________. fairly valued overvalued undervalued
