19) Assume the following information about the market and CrashMasters' stock. CrashMasters' beta = 1.50, the risk-free rate is 3.50%, the market risk premium is 10.0%. Using the SML, what is the expected return for CrashMasters' stock? 19) ______

20) Kerry purchased Black Forest Industries Inc. stock for $14.65 and sold it 6 months later for $17.38 after receiving a $0.25 dividend. What was Kerry's holding period return (HPR), Annual Percentage Rate (APR), and Effective Annual Rate (EAR)? 20) ______

21) Sunny, Inc. is considering a four-year project that has an initial outlay or cost of $100,000. The respective future cash inflows from its project for years 1, 2, 3 and 4 are: $50,000, $40,000, $30,000 and $20,000. Will it accept the project if its required payback period is 31 months? 21) ______

22) DumDum, Inc. is considering a very risky five-year project that has an initial outlay or cost of $70,000. The future cash inflows from its project for years 1, 2, 3, 4, and 5 are all the same at $35,000. Calculate the internal rate of return to evaluate the project. Will DumDum accept the project if its hurdle rate is 41.00%? 22) ______

23) Pig, Inc. is currently considering an eight-year project that has an initial outlay or cost of $80,000. The future cash inflows from its project for years 1 through 8 are the same at $30,000. Pig has a discount rate of 13%. Because of concerns about funds being short to finance all good projects, Pig wants to compute the profitability index (PI) for each project. What is the PI for Pig's current project? 23) ______

24) Find the Modified Internal Rate of Return (MIRR) for the following annual series of cash flows, given a discount rate of 10.50%: Year 0: -$75,000; Year 1: $15,000; Year 2: $16,000; Year 3: $17,000; Year 4: $17,500; and, Year 5: $18,000. 24) ______

25) Pie, Inc. is considering an eight-year project that has an initial after-tax outlay or after-tax cost of $180,000. The future after-tax cash inflows from its project for years 1 through 8 are the same at $38,000. Pie uses the net present value method and has a discount rate of 11.50%. Calculate the Net Present Value of the project. Will Pie accept the project? 25) ______

26) Consider the following four-year project. The initial outlay or cost is $180,000. The respective cash inflows for years 1, 2, 3 and 4 are: $100,000, $80,000, $80,000 and $20,000. What is the discounted payback period if the discount rate is 11%? 26) ______