1.ABC Inc. is considering a project that has the following cash flow and WACC data.

What is the project's NPV?Note that if a project's expected NPV is negative, it should be rejected.

WACC:6%

Year012345

Cash flows-$1,200$200$400$400$300$300

2.ABC Enterprises is considering a project that has the following cash flow and WACC data.What is the project's NPV?Note that a project's expected NPV can be negative, in which case it will be rejected.

WACC:5%

Year0123

Cash flows-$1,050$450$460$470

3.Warranty Inc. is considering a project that has the following cash flow and WACC data.

What is the project's NPV?Note that a project's expected NPV can be negative, in which case it

will be rejected.

WACC:10%

Year0123

Cash flows-$950$500$400$300

4.Berry Company is considering a project that has the following cash flow and WACC

data.What is the project's NPV?Note that a project's expected NPV can be negative, in which

case it will be rejected.

WACC:8%

Year012345

Cash flows-$1,000$400$390$380$370$360

5.Data Computer Systems is considering a project that has the following cash flow data.What is the project's IRR?Note that a project's IRR can be less than the WACC (and even negative), in which case it will be rejected.

Year0123

Cash flows-$1,200$600$550$500

6.XYZ Corp. is considering a project that has the following cash flow data.What is the project's IRR?Note that a project's IRR can be less than the WACC or negative, in both cases it will be rejected.

Year0123

Cash flows-$1,000$325$425$525

7.WWW Company is considering a project that has the following cash flow data. What is the project's IRR?Note that a project's IRR can be less than the WACC or negative, in both cases it will be rejected.

Year01234

Cash flows-$1,200$400$400$400$500

8.Talent Inc. is considering a project that has the following cash flow data.

(a) What is the project's payback period?

(b) What is the project's discounted payback period?

Assume the cost of capital is 8%.

Year0123

Cash flows-$1,150$500$500$600

9.Redesign Inc. is considering a project that has the following cash flow data.

(a) What is the project's payback period?

(b) What is the project's discounted payback period?

Assume the cost of capital is 10%.

Year0123

Cash flows-$500$200$200$200

10 .ABC Inc.'s stock has a 30%chanceof producing a 20% return, a 40% chance of

producing a 0% return, and a 30% chance of producing a -15% return.What is the firm's

expected rate of return?

11.XYZInc. is considering a capitalbudgetingproject that has an expected return of 32%

and a standard deviation of 12%.What is the project's coefficient of variation?

12.An Investor has $200,000 invested in a 2-stock portfolio.$50,000 is invested in Stock X

and the remainder is invested in Stock Y.X's beta is 1.5 and Y's beta is 1.70.What is the

portfolio's beta?

13.Calculate the required rate of return for Best Inc., assuming that (1) investors expect a

3% rate of inflation in the future, (2) the real risk-free rate is 3.0%, (3) the market risk premium

is 5.0%, (4) the firm has a beta of 1.2, and (5) its realized rate of return has averaged 10.0%

over the last 5 years.

14.Calculate the required rate of return for Hope Inc., assuming that (1) investors expect a

2.0% rate of inflation in the future, (2) the real risk-free rate is 3.5%, (3) the market return on

S&P 500 Index is 8.5%, (4) the firm has a beta of 1.5, and (5) its realized rate of return has

averaged 10.0% over the last 5 years.

15.Chance Inc's stock has an expected return of 15%, abetaof 1.5, and is in

equilibrium.Assume the nominal risk-free rate is 4.00%.

(a) what is themarketrisk premium?

(b) What is theequityrisk premium?