1 What is the maximum price that you would be willing to pay for a non-constant growth stock that has the following characteristics: (a) Non-Constant Growth Rate: 20%, (b) Constant Growth Rate: 5.5%, (c) Dividend: $2.36, and (d) Required Rate of Return: 12%.

2 Determine how much you would be willing to pay for an annuity due that has the following characteristics: (a) PMT: $12,000, (b) RATE: 9.4%, and (c) NPER: 12.

3. How much would you be willing to pay for a bond that pays semi-annual coupon payments and has the following characteristics: (a) NPER: 12, (b) YTM: 5.25%, and Coupon Payment: $25.80.

4.

Table 1: Cash Flow Summary

Year Project A Project B

0 -30000 -30000

1 15000 12500

2 15000 10000

3 10000 15000

4 10000 15000

16. If Company XYZ has a WACC of 7% and the two projects are independent, which project would you accept based upon NPV rules?

17. If Company XYZ has a WACC of 22% and the two projects are mutually exclusive which project would you accept based upon NPV rules?

18. What is the Internal Rate of Return for Project B?

19. What is the Profitability Index for Project A?

20. What is the Payback Period for Project A?

21. What is the Crossover Rate for Projects A and B?

22. Calculate the difference between daily and annual compounding, given the following information: (a) PV: $25,000, (b) NPER: 30, and (c) RATE: 11%.

23. Calculate the PMT on a mortgage, given the following information: (a) PV: $362,000, (b) RATE: 5%, and NPER: 30.

24. Calculate the present value of a lump sum payment with the following characteristics: (a) RATE: 4.0%, (b) NPER: 10, and (c) FV: $65,230.

25. Calculate the RATE given the following characteristics: (a) PV: $12,520, (b) FV: $54,000, and (c) NPER: 20.

26. Calculate the NPER given the following characteristics: (a) PV: $80,000, (b) FV: $134,000, and (c) RATE: 6.3%.

27. Calculate the RATE given the following characteristics: (a) PMT: $15,250 (you are paying), (b) FV: $134,000, and (c) NPER: 10.

28. Calculate the required rate of return on a companys stock that has the following characteristics: (a) Constant Growth Rate: 4%, (b) Price: $22.30, and (c) Dividend (Has Been Paid): $5.00.