1. A firm has an opportunity to invest in a project and earn 600,000 next year from it. The future years are expected to see cash flow growing at inflation, which is best predicted at 1.7%, in perpetuity. The project is expected to produce these cash flows in perpetuity. The internal rate of return for the project is 17%. What is the present value of the project?

2. D/E is 3.0

Total Assets are 4 million

Long-term debt is 2 million

Working capital is 200,000

FIND the Current Ratio.

3. Beta is 1.6.

Risk free rate is 1.7%.

Equity risk premium is 6%

Use CAPM and find the cost of equity.