a) What is the most appropriate discounting rate that an investor should use to discount the expected cash flow in order to value an investment project? b) Define this rate from the classical theory of financing. (i.e. state the formula and define each variable) c) Show the relationship between each independent variable and the dependent variable? Explain from finance theoretical point of view when Return on Equities (ROE) is greater than or equal to Return on Assets (ROA)? sculate the Net Present Value (NPV) of the following project for discount rates of: 0%,50%, and 100%. b) What is the IRR of the project? c) Why does NPV in accordance with the objectives of the manager? Q2 a) What is the "agency problem" i.e. (Agency theory)? b) Give one example from corporate finance decisions on agency theory. c) Give one example from Financing corporation decisions on agency theory. Q3 Why would the internal rate of return (IRR) in certain situations leads to a conflicting conclusion? Explain when does that happen with hypothetical numbers and graph your case. Q4 An investment requires a net investment of SR. 100,000 . The project is expected to generate an annual cash flow of SR. 28,000 per year for the next 5 years. If the cost of capital is 12%. Determine the payback period of this project