Chung Industrieshas $650,000 of assets, and it hasdebt outstanding. Its sales for the last year were $550,000, and its net income was $25,000. The company is trying tolower costs and get the return on equity up to 15%. What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant?Do not round your intermediate calculations.

a.10.23%

b.19.48%

c.17.73%

d.8.00%

e.8.15%

Anderson Systems is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that if a project's projected NPV is negative, it should be rejected.

WACC:

10.00%

Year

0

1

2

3

Cash flows

-$100,000

$50,000

$40,000

$30,000

a.1165.88

b.1051.84

c.2188.77

d.2190.67

e.1284.95

A company is considering a new preferred stock issue.The issue would incur a flotation cost of 3%, sell for $80 per share and pay a 6% annual dividend.What is thefirm's cost of preferred stock?

a.8.02%

b.7.73%

c.6.66%

d.9.14%

e.6.18%