Find the net present value (NPV) for the following series of future cash flows, assuming the companys cost of capital is 13.57 percent. The initial outlay is $346,897.

Year 1: 151,782

Year 2: 152,908

Year 3: 173,713

Year 4: 139,628

Year 5: 127,498

Round the answer to two decimal places.

Your Answer:

3.

A project has an initial outlay of $2,774. It has a single cash flow at the end of year 4 of $4,755. What is the internal rate of return (IRR) for the project?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Your Answer:

4. Find the profitability index (PI) for the following series of future cash flows, assuming the companys cost of capital is 9.12 percent. The initial outlay is $405,826.

Year 1: $140,542

Year 2: $181,757

Year 3: $144,962

Year 4: $131,610

Year 5: $150,851

Round the answer to two decimal places.

Your Answer:

5.

Black Hill Inc. sells $100 million worth of 20-year to maturity 13.12% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $981 for each $1,000 bond. What is the before-tax cost of capital for this debt financing?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

You should use Excel or financial calculator.

6.

Given the following information on Big Brothers, Inc. capital structure, compute the companys weighted average cost of capital (WACC). The companys marginal tax rate is 40%.

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Type of Capital	Percent of Capital Structure	Before-Tax Component Cost
Bonds	48%	13.46%
Preferred Stock	17%	17.81%
Common Stock	Please calculate it	15.34%