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Ford Motors expects a new hybrid-engine project to produce incremental cash flows of $50 million each year, and expects those to grow at 5% each

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Ford Motors expects a new hybrid-engine project to produce incremental cash flows of $50 million each year, and expects those to grow at 5% each year. The uplront project costs are $420 million and Ford's weighted average cost of capital is 9% If the issuance costs for external finances are $15 million, what is the not present value (NPV) of the project? O A. $734 million OB. 5856 million O C. $897 million OD. $815 million Consider the following average annual retums: Investment Small Stocks S&P 500 Corporate Bonds Treasure Bonds Treasury Bills Average Return 23.4% 13.2% 7.5% 6.2% 4.6% What is the excess return for the portfolio of small stocks? O A. 16.9% O B. 11.3% O C. 18.8% O D. 16%

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