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QUESTION 9 General Motors is considering selling several of its plants for the cash flows noted below (the plants are expected to produce no cash
QUESTION 9 General Motors is considering selling several of its plants for the cash flows noted below (the plants are expected to produce no cash flows other than the cash produced when they are sold) Plant A for $800,000 in 3 years and the cost of capital is 6% - Plant B for $900,000 in 4 years and the cost of capital is 5% - Plant C for $600,000 in 5 years and the cost of capital is 7% Which Plant is the riskiest plant (riskiest investment)7? Planta Plant B Plantc O All are equally as risky QUESTION 10 A broker says, I have a product that will pay you 100 dollars per year for the rest of time (in perpetuity). If the current interest rate is 5%, then what is the value of this product? 0 2000 0 1500 0 1200 50 QUESTION 11 You put 1000 dollars in the bank in 4 years time, how much is sitting in the bank at year 7 if the interest rate you can earn is 2% 0 1022.45 1211.87 0 1050.92 1061.21
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