Q.5 The return required on a risky security in excess of that earned on a risk-free security is called a:

Multiple Choice

• Return premium.

• Risk premium.

• Variance.

• Average return.

• Excess return.

Q6. A company's 2018 statement of financial position showed net fixed assets of $6,000,000, and the 2019 statement of finacial position showed net fixed assets at $7,500,000. The company's 2019 statement of comprehensive income showed a depreciation expense of $600,000. What was net capital spending in 2019?

Q8. A company purchased an asset that has an installed cost of $3,000,000. The asset qualifies for a 20% CCA rate. What is the beginning UCC for year 2?

Q.9 A company is considering a project that would require the purchase of an asset for $150,000. The asset belongs in a 20% CCA class and is expected to have no salvage value at the end of the 7-year project. The project would require a net working capital investment of $26,000 up-front. The company has a tax rate of 30% and a required return of 16%. The project is expected to generate annual pre-tax cost savings of $45,000. What is the expected present value of after-tax savings for this project?