1. CJ Co stock has a beta of .99 the current risk-free rate is 5.69 percent, and the expected return on the market is 13.09percent.What is CJ Co's cost of equity?
2. Your Company is considering a new project that will require $500,000 of new equipment at the start of the project. The equipment will have a depreciable life of 10 years and will be depreciated to a book value of $100,000 using straight-line depreciation. The cost of capital is 14%, and the firm's tax rate is 34%. Estimate the present value of the tax benefits from depreciation.
3. Your company has spent $330,000 on research to develop a new computer game. The firm is planning to spend $53,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated; they total $6,300. The machine has an expected life of 5 years, a $38,000 estimated resale value, and falls under the MACRS 7-Year class life. Revenue from the new game is expected to be $430,000 per year, with costs of $230,000 per year. The firm has a tax rate of 30 percent, an opportunity cost of capital of 15 percent, and it expects net working capital to increase by $63,000 at the beginning of the project. What will be the net cash flow for year one of this project?
4. Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 10 percent, and that the maximum allowable payback and discounted payback statistic for the project are 2 and 3 years, respectively.

Cash Flow-

0-1,050

1-150

2-450

3-650

4-650

5-250

6-650

Use the discounted payback decision rule to evaluate this project; should it be accepted or rejected?