reject In such a situation, it is not clear whether to accept or reject the project. a situation, the project should be accepted if the NPV is greater than 0 . In such a situation, the project should always be accepted. lower. In such a situation, it is not clear whether to accept or reject the project. c. Notice that this project's greatest NPVs come at very high discount rates. Can you provide an intuitive explanation for that pattern? (Select the best answer below.) $519,857,467 ( 86.4% of the undiscounted outflow). C. There is no intuitive explanation when there are multiple IRRs. D. A and B provide an intuitive explanation. d. If Acme Oscillators' cost of capital is 8%, the MIRR of the investment is The company should (1) the investment because its MIRR is (2) %. (Round to four decimal places.) than the cost of capital. (Select from the drop-down menus.) d. The correlation coefficient between VOO and QQQ is (Round to two decimal places.) How would you characterize the correlation of returns of the two ETFs? (Select the best answer below.) A. The two ETFs are strongly positively correlated. B. The two ETFs are strongly negatively correlated. e. Are there any benefits of diversification achieved by Jamie through creation of the portfolio? (Select the best answer below.) A. Yes, combining these two strongly positively correlated assets will significantly reduce the overall portfolio risk. B. No, combining these two strongly negatively correlated assets will not significanly reduce the overall portfolio risk. C. Yes, combining these two strongly negatively correlated assets will significantly reduce the overall portfolio risk. D. No, combining these two strongly positively correlated assets will not significantly reduce the overall portfolio risk. 5: Data Table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) A. Reject B. Accept 7: Data Table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) following table: 7. The firm has a cost of capital of 8%. a. Calculate the payback period for the proposed investment. b. Calculate the discounted payback period for the proposed investment. c. Calculate the net present value (NPV) for the proposed investment. d. Calculate the probability index for the proposed investment. e. Calculate the internal rate of return (IRR) for the proposed investment. f. Calculate the modified internal rate of return (MIRR) for the proposed investment. g. Evaluate the acceptability of the proposed investment using NPV, IRR, and MIRR. a. The payback period of the proposed investment is years. (Round to two decimal places.) b. Calculate the discounted cash flows for the proposed investment in the following table. (Round to the nearest cent.) The discounted payback period of the proposed investment is years. (Round to two decimal places.) c. The NPV of the proposed investment is $ d. The probability index of the proposed investment is e. The IRR of the proposed investment is f. The MIRR of the proposed investment is (Round to the nearest cent.) (Round to two decimal places.) \%. (Round to two decimal places.) %. (Round to two decimal places.) g. Should Rieger International accept or reject the proposed investment? (Select the best answer below.) The beta of the portfolio is (Round to four decimal places.) 16. Problems with the IRR method Acme Oscillators is considering an investment project that has the following rather unusual cash flow pattern: 6. a. Calculate the project's NPV at each of the following discount rates: 0%,5%,10%,20%,30%,40%,50%. or reject this investment? c. Notice that this project's greatest NPVs come at very high discount rates. Can you provide an intuitive explanation for that pattern? d. If Acme Oscillators' cost of capital is 8%, should the company accept or reject this investment based on MIRR? a. Calculate the NPV at the following discount rates for this investment: 0%,5%,10%,20%,30%,40%,50%. The NPV at 0% is $ The NPV at 5% is $ The NPV at 10% is \& The NPV at 20% is \$ The NPV at 30% is \& The NPV at 40% is 9 The NPV at 50% is \& (Round to the nearest dollar.) (Round to the nearest dollar.) (Round to the nearest dollar.) (Round to the nearest dollar.) (Round to the nearest dollar.) (Round to the nearest dollar.) (Round to the nearest dollar.) b. What do the calculations tell you about this project's IRR? (Select the best answer below.) A. The calculations tell you this project has no IRR. B. The calculations tell you this project has more than one IRR. C. The calculations tell you that this project's IRR is negative. D. The calculations tell you this project's IRR is greater than 50%. the following table: 5. a. Calculate the portfolio return, rp, for each of the 6 years assuming that 60% is invested in VOO and 40% is invested in QQQ. b. Calculate the average annual return for each ETF and the portfolio over the six-year period. d. Calculate the correlation coefficient for the two ETFs. How would you characterize the correlation of returns of the two ETFs? e. Discuss any likely benefits of diversification achieved by Jamie through creation of the portfolio. a. The portfolio return for year 2014 is The portfolio return for year 2015 is The portfolio return for year 2016 is The portfolio return for year 2017 is The portfolio return for year 2018 is The portfolio return for year 2019 is b. The average return of VOO over the 6 -year period is The average return of QQQ over the 6-year period is The average return of the portfolio over the 6-year period is c. The standard deviation of VOO returns over the 6-year period is The standard deviation of QQQ returns over the 6-year period is The standard deviation of the portfolio returns over the 6-year period is %. (Round to two decimal places.) \%. (Round to two decimal places.) \%. (Round to two decimal places.) \%. (Round to two decimal places.) \%. (Round to two decimal places.) \%. (Round to two decimal places.) %. (Round to two decimal places.) %. (Round to two decimal places.) %. (Round to two decimal places.) %. (Round to two decimal places.) %. (Round to two decimal places.) %. (Round to two decimal places.) The standard deviation of the portfolio returns is (1) than the standard deviation of QQQ but (2) than the standard deviation of VOO