7. Polk Products is considering an investment project with the following cash flows: Initial investment -$100,000 Yr 1 40,000 Yr 2 90,000 Yr 3 30,000 Yr 4 60,000 The company has a 10 percent cost of capital. What is the project's discounted payback period?

8. You are considering the purchase of an investment that would pay you $5,000 per year for years 1-5, $3,000 per year for years 6-8 and $2,000 per year for years 9 and 10. If you require 14 percent rate of return and the cash flow occur at the end of each year, then what is the maximum amount you should be willing to pay for this investment?

9. Martin Manufacturers is considering a five-year investment which cost $100,000. The investment will produce cash flows of $25,000 each year for the first two years and $50,000 a year for each of the remaining three years. The company has a cost of capital of 12 percent. What is the MIRR of the investment?

10. Cypress Corporation has a target capital structure of 60% debt, 15% preferred stock, and 25% common stock. Currently Cypress has a capital structure of 75% debt, 10% common stock, and 15% preferred stock. The after tax cost of debt is 6%. The preferred stock has a par value of $100 per share, a $9 per share dividend, and a market price of $80 per share. The common stock of Cypress trades at $84 per share and has a projected dividend (D1) of $3.36. The stock price and dividend are expected to continue to grow at 12% for the foreseeable future. The CFO expects the company to have $590,000 available from retained earnings. What is the weighted average cost of capital (WACC) for Cypress?