2.

You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $19,500 to purchase and which will have OCF of $2,300 annually throughout the vehicles expected life of three years as a delivery vehicle; and the Toyota Prius, which will cost $28,000 to purchase and which will have OCF of $1,200 annually throughout that vehicles expected 4-year life. Both cars will be worthless at the end of their life. You intend to replace whichever type of car you choose with the same thing when its life runs out, again and again out into the foreseeable future

If the business has a cost of capital of 13 percent, calculate the EAC. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

Scion's EAC	$
Toyota's EAC	$

8.

Johnny Cake Ltd. has 12 million shares of stock outstanding selling at $20 per share and an issue of $60 million in 10 percent annual coupon bonds with a maturity of 18 years, selling at 94.0 percent of par. Assume Johnny Cakes weighted-average tax rate is 34 percent, its next dividend is expected to be $3 per share, and all future dividends are expected to grow at 5 percent per year, indefinitely.

What is its WACC? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

WACC

%

9.

WhackAmOle has 4 million shares of common stock outstanding, 3.0 million shares of preferred stock outstanding, and 95,000 bonds. Assume the common shares are selling for $61 per share, the preferred shares are selling for $50.00 per share, and the bonds are selling for 104 percent of par.

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

Equity weight	%
Preferred stock weight	%
Debt weight	%

10.

An all-equity firm is considering the projects shown below. The T-bill rate is 3 percent and the market risk premium is 6 percent.

Project		Expected Return				Beta
A			5	%		0.3
B			16	%		1.1
C			10	%		1.3
D			13	%		1.5

Calculate the project-specific benchmarks for each project. (Round your answers to 2 decimal places.)

Project A	%
Project B	%
Project C	%
Project D	%

Please show all of the steps used to arrive at these answers. I will rate any right answers with a thumb up. Thanks to anyone who can help, my teacher has not taught me any of this