E) Company A could pay a fixed rate of 7.75 percent. 8) Dressler Tech is considering a 3-year project with a discount rate of 15 percent, an initial cost of $95,000, projected sales of 1,300 units on the last day of each year, and a cash flow per unit of $38. The project can be abandoned following the sales on the last day of Year 2 at which time the project's assets could be sold for an estimated $40,000. What is the net present value of this project at Time 0 if the sales forecast for Year 3 of the project is revised such that there is a 50/50 chance that the sales will be either 1,100 or 1,500 units a year? A) S19,172 UM B) -$2,526 C)-$13,474 D) $18,887 E) $8,192 9) The common stock of Westover Foods is currently priced at $18.70 a share. One year from now, the stock price is expected to be either $16 or $22 a share. The risk-free rate of return is 3.4 percent. What is the current value of a one-year call option on this stock if the exercise price is $20? A) SO B) S1.08 E) S.76 D) $1.93 C) $2.58 10) Which one of the five factors included in the Black-Scholes option pricing model cannot be directly observed? A) Strike price B) Stock price C) Risk-free rate D) Standard deviation E) Life of the option Lillion it would depreciate that machine straight-line to zero ra1 narcent and