1.At the beginning of the month, you owned $8,000 of General Dynamics, $7,000 of Starbucks, and $5,000 of Nike.The monthly returns for General Dynamics, Starbucks, and Nike were 7.60 percent, 1.68 percent, and 0.70 percent.What is your portfolio return?(Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Portfolio return___________%

2. The past five monthly returns for PG&E are 3.31 percent, 4.23 percent, 3.91 percent, 6.68 percent, and 3.72 percent. Compute the standard deviation of PG&Es monthly returns.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Standard deviation_________%

3.Following are three economic states, their likelihoods, and the potential returns:

Economic State Probability Return

Fast growth 0.20 30%

Slow growth 0.58 5

Recession 0.22 35

Determine the standard deviation of the expected return.(Round your answer to 2 decimal places.)

Standard deviation _____%

4. BetterPie Industries has 6 million shares of common stock outstanding, 4 million shares of preferred stock outstanding, and 15,000 bonds. Assume the common shares are selling for $49 per share, the preferred shares are selling for $26.50 per share, and the bonds are selling for 99 percent of par.

What would be the weights used in the calculation of BetterPies WACC?(Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Equity weight _______%

Preferred stock weight ______%

Debt weight _______%

5.Marme, Inc., has preferred stock selling for 96 percent of par that pays a 13 percent annual coupon.

What would be Marmes component cost of preferred stock?(Round your answer to 2 decimal places.)

Cost of preferred stock________%

6. You are evaluating two different cookie-baking ovens. The Pillsbury 707 costs $71,500, has a 5-year life, and has an annual OCF (after tax) of $11,600 per year. The Keebler CookieMunster costs $98,000, has a 7-year life, and has an annual OCF (after tax) of$9,600 per year.

If your discount rate is 11 percent, what is each machines EAC?(Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

Pillsbury 707 $_________

Keebler CookieMunster $_________

7. You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $150 initially, and then $105 per year in maintenance costs. Machine B costs $220 initially, has a life of three years, and requires $170 in annual maintenance costs. Either machine must be replaced at the end of its life with an equivalent machine.

The discount rate is 13 percent and the tax rate is zero. Calculate the EAC.(Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

Machine $________

Machine B $________