41. The internal rate of return (IRR) is defined as which of the following A) IRR may produce multiple rates of returm when cash flows are non-conventional. B) IRR is best used for comparing mutually exclusive projects. C) IRR is almost not used in the business world anymore D) IRR is mainly used to evaluate small projects. 42. Calculate the net present value (NPV) of the following project, which has an initial cash outflow - $34,900. The required return - 15.35%. Cash Inflows Year 1. $12,500 2. 19,700 10,400 A) -S3,383.25 B) -$2,785.61 C) -S2,280.52 D) S54,171.38 E) S62,419.15 Questions 43-47: Wal-Mart plans to open a new store near JU. Wal-Mart is going to finance via bond market and stock market. Total capital required is 10 million dollars. 4 million dollars are going to be borrowed from the bond market. This 4% annual coupon bond is traded in the market for $1050 and is going to be matured in 8 years. There is no flotation fee. Tax rate is 40%. Wal-Mart plans to pay dividend of $2 per share next year. The dividend is expected to grow at the rate of 6% cach year. The stock is traded at $120 per share. The flotation fee is 5%. 43. What is the percentage of capital financed from the bond market (weight of debt)? A) 100% B) 60% C) 40% D) 30% 44. How much is the after tax cost of debt of Wal-Mart? A) 2.13% B) 1.65% C) 2.38% D) 1.97%