q1 The director of capital budgeting for KLM Ltd has identified a project with the following expected net cash flows:

YearExpected Net Cash Flows y0($103.9) y1 $53.9 y2 63.9 y3 73.9

This project has a 9% p.a. cost of capital. What is the projects NPV?

Express your answer in two decimal places

q2 You buy a two year bond which pays interest of 11.77% p.a. At the end of year two, you purchase a one year bond that pays interest of 4.42%.According to the expectations theory of interest rates, you could have purchased a three year bond today that paid interest each year of:

Express your answer in four decimal places (e.g. 0.0231 instead of 2.31%)

q3 Suppose that you will deposit into a CBA bank account $0.115 in one years time,$0.23in two years time,$0.2875in three years time, and$0.575in four years time. Assuming that you are able to earn a return on your money of 3.75% p.a., what will be the total value of the four deposits at T₄?

Do your calculations to four decimal places, with two decimal places for your final answer

q4 TSR Ltd is considering investing in a new printing machine. The machine costs $107800 and is projected to generate $26950 net cash-inflows at the end of each year for a period of 10 years. TSR estimates the appropriate discount rate to be 6% p.a. What is the NPV of the new printing machine?

Express your answer in two decimal places

q5 What is the required rate of return on a share that is expected to pay a constant dividend of $4.49 in perpetuity and is priced at $53.9?

Express your answer in four decimal places (e.g. 0.0213 instead of 2.13%)