Question
1.A project is expected to create operating cash flows of $28,000 a year for three years. The initial cost of the fixed assets is $58,000.
1.A project is expected to create operating cash flows of $28,000 a year for three years. The initial cost of the fixed assets is $58,000. These assets will be worthless at the end of the project. An additional $3,000 of net working capital will be required throughout the life of the project. What is the project's net present value if the required rate of return is 9 percent?
A)$3,000.00
B)$15,192.80
C)$9,192.80
D)$12,192.80
2.
The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20 percent a year for the next 4 years and then decreasing the growth rate to 4 percent per year. The company just paid its annual dividend in the amount of $2.70 per share. What is the current value of one share of this stock if the required rate of return is 8.20 percent? $101.15 $117.93 $141.33 $138.63 $115.23 3.
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