q1. Which of the following statements is true?

a. The stock price of a company should increase after announcing a project with positive net present value of growth opportunities.

b. The stock price of a company should increase after announcing a project with an IRR greater than the discount rate.

c. The stock price of a company should increase after announcing a positive net present value project.

d. All of THESE

q2. A machine has an initial cost of $500,000 and useful life of 10 years. The tax rate is 40% and the discount rate is 12%. The annual depreciation tax shield is $20,000 in years 1 to 10. What is the present value of the annual depreciation tax shield?

a. None of THESE

b. $45,201.78

c. $113,004.46

d. $67,802.68