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Project A Project B Initial Outlay (50,000) (70,000) Inflow Year 1 12,000 13,000 Inflow Year 2 12,000 13,000 Inflow Year 3 12,000 13,000 Inflow Year
Project A | Project B | ||||
Initial Outlay | (50,000) | (70,000) | |||
Inflow Year 1 | 12,000 | 13,000 | |||
Inflow Year 2 | 12,000 | 13,000 | |||
Inflow Year 3 | 12,000 | 13,000 | |||
Inflow Year 4 | 12,000 | 13,000 | |||
Inflow Year 5 | 12,000 | 13,000 | |||
Inflow Year 6 | 12,000 | 13,000 | |||
You are considering 2 independent projects, A and B. The required rate of return for both projects is 12%. Calculate NPV and indicate if the projects should be accepted. | |||||
An investor currently holds the following portfolio: | |||||
Calculate the Beta for this portfolio. Is this a risky portfolio? Why? | |||||
(Remember to first calculate the percentage (%) each stock is of the overall portfolio) | |||||
Invested Amount | Beta | ||
Stock A | 8000.00 | 1.3 | |
Stock B | 24000.00 | 1.8 | |
Stock C | 48000.00 | 2.2 |
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