Please answer all parts
Which of the following is considered to be a contingent project? Select one: a. Expanding the size of a warehouse and purchasing stock. b. Planning an expansion of business accommodation and the purchase of a state of the art piece of machinery. c. Choosing between two brands of computer networking. d. Planning an oil refinery and a pilot study searching for oil. Consider the capital budgeting decision be made with the following data about 2 competing projects. Project A has an NPV of $12 500, and IRR of 10% and a payback period of 3 years. Project B has an NPV of $12 000, but an IRR of 13% and a payback period of 2 years 10 months. Which project(s) would be chosen on a mutually exclusive basis? Select one: a. Project A and Project B b. Project A c. Neither Project A nor Project B d. Project B To make provision for the possible impact of recessions in the future, Bunbury Mutual Bank would like to set up a reserve fund. The fund will earn an interest rate of 7% per annum. If the fund pays a fixed amount of $13 million to the bank annually for an infinite period, starting three years from today and the annual payment grows at 2.5% per annum, how much does the bank need in the fund today? Select one: a. $270.0 million b. $220.4 million c. $252.3 million d. $235.8 million Three years ago, Betty deposited $12,000 into an account Wagga Wagga Mutual Bank that pays an interest rate of 7% per annum, compounded half-yearly. The accumulated balance five years from now will be Select one: a. $20,807.83 b. $20,618.23 c. $21,978.04 d. $21,325.80 Which of the following statements is true of the price of shares when they first trade on the ASX? Select one: a. Price may rise due to the size of underwriting fees and other expenses. b. Price may rise due to uncertainty surrounding the company's future earnings. c. Price may rise if the IPO was over-subscribed. d. Price may rise because speculators are selling their shares. Murringo Horticultural Co. Ltd is planning to list on the ASX by issuing 100 million ordinary shares, at a price of $2.00 per share. The company's profits have grown rapidly over the last three years. Which of the following is NOT a cost component that will make up the total cost for Murringo Horticultural to issue these new shares and list on the ASX? Select one: a. The underwriting spread. b. Out-of-pocket expenses, including legal and accounting fees, as well as fees for taxation advice. c. Underpricing, which is the difference between the offering and closing price on the first day of the IPO times the number of shares. d. The cost of printing the annual report. Gi Gi has an opportunity to invest $24,000 today at a nominal interest rate of 7.8% per annum, compounding weekly. If she wants this to grow to $30,000, how long does she need to hold her investment? Select one: a. 142.5 weeks b. 149.6 weeks c. 150.7 weeks d. 148.9 weeks Boorowa Pastoral Ltd plans to raise $2.2 million to purchase land the graze more merino sheep. It will issue bonds with a term to maturity of 10 years. The face value per bond will be $1,000 and the coupon rate will be 7.5% per annum, pald semi-annually. Similar corporate bonds are trading at a yield to maturity of 9% per annum, compounded semi-annually. It is expected that these new bonds will trade at this rate. If the total cost of the bond issue is 3.5%, how many bonds will Boorowa Pastoral need to issue? Select one: a. 2,527 b. 2,437 c. 2,438 d. 2,526
