A Years Cash flow of project $12000 $2000 $4000 $6000 $7000

B years cash flow of project $15000 $4000 $5000 $5000 $ 3500

Requirement: 1. Pay Back Period 2. Net present value 3. Internal rate of return 4. Profitability index 5. What is mutually exclusive project and independent project?

2. If you analyze the capital structure of the company, you will find following target capital structure: Debentures Rs. 3000000 Preferred Stock RS. 480000 Common Stock RS. 6520000 Total RS. 10000000 Under the prevailing market conditions, financial analysts have estimated a risk free rate of return of 10% and a market rate of return of 14%. The corporations common stocks have a beta 1.5. Bonds carry and interest rate of 9.5%. Preferred stocks have a return of 10% p.a. and corporate tax rate is 40%. Calculate weighted average cost of capital. Note: Considered stock valuation questions and bonds valuation questions those you have already solved in recent assignments.