Q1. Rutledge, Inc., has invested $100,000 in a project that will produce cash flows of $45,000, $37,500, and $42,950 over the next three years. Find the payback period for the project.

Q2. Using Capital Asset Pricing model (CAPM), Calculate expected rate of return for a stock if the risk free rate of return is 9 percent, expected return on market is 14 percent and beta for the stock is 1.4.