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1. Amazon is considering a new warehouse which will cost $130 million initially and another $90 million at the end of year 3. This project

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1. Amazon is considering a new warehouse which will cost $130 million initially and another $90 million at the end of year 3. This project is expected to produce incremental after-tax profits of $41 million, $42 million, $36 million, $52 million, $51 million, and $35 million to be received at the end of years 1, 2, 3, 4, 5 and 6 respectively. A) Draw a timeline. B) If the WACC is 6%, what is the project's NPV? 2. What is the MIRR for Amazon's project described in Q #1? (Your answer should be a % carried to 1 place.) 3. You are a financial advisor for a client who is comfortable with risk consistent with the S&P 500. You are recommending a well-diversified, large cap stock portfolio with 2 Standard Deviations of +/- 35 percentage points. If the average historical ATR of the portfolio is +11%, A) What is the likely range of ATRs next year? And B) What is the likelihood next year's ATR will be within that range? 4. In describing the risk of the proposed portfolio (from Q 3), you explain to your client that she can be % confident any losses next year will not exceed

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