Problem 8-7 Calculating NPV and IRR [LO 3, 4]

A project that provides annual cash flows of $2,750 for nine years costs $9,000 today. At a required return of 10 percent, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $ At a required return of 29 percent, what is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $ At what discount rate would you be indifferent between accepting the project and rejecting it? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Discount rate %

Problem 8-1 Calculating Payback [LO 1]

Consider the following cash flows:

Year	Cash Flow
0	$	6,800
1		1,950
2		4,100
3		1,750
4		1,450

What is the payback period for the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Payback period years

Problem 7-25 Stock Quotes [LO 1]

Youve collected the following information from your favorite financial website.

52-Week Price		Stock (Div)	Div Yld %	PE Ratio	Close Price	Net Chg
Hi	Lo
77.40	10.43	Palm Coal .36	2.6	6	13.90	.24
55.81	33.42	Lake Lead Grp 1.54	3.8	10	40.43	.01
130.93	69.50	SIR 2.00	2.2	10	88.97	3.07
50.24	13.95	DR Dime .80	5.2	6	15.43	.26
35.30	20.77	Candy Galore .35	1.5	28	??	.18
Using the dividend yield, calculate the closing price for Candy Galore on this day. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Stock price $ Assume the actual closing price for Candy Galore was $23.02. Your research projects a 4.75 percent dividend growth rate for Candy Galore. What is the required return for the stock using the dividend discount model and the actual stock price? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return % Problem 7-13 Stock Valuation and PE Ratio [LO 2] The Sleeping Flower Co. has earnings of $1.60 per share. If the benchmark PE for the company is 21, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current stock price $ If the benchmark PE for the company is 24, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current stock price $