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Safety Company is installing new equipment at a cost of $75,000. Expected cash flows from this project over the next four years will be $25,000,

Safety Company is installing new equipment at a cost of $75,000. Expected cash flows from this project over the next four years will be $25,000, $28,000, $34,000, and $40,000. The company's cost of capital is 9 percent. What is the project's payback period?

A)

2.65 years

B)

3.10 years

C)

3.39 years

D)

more than 4 years

Smart Consumer Products Co. has issued preferred stock with a $60 par value. The firm pays a quarterly dividend of $.85 on this stock. What is the current price of this preferred stock given a required rate of return of 9percent?

A)

$37.78

B)

$50.00

C)

$54.43

D)

$62.50

San Jose Property Development Company is refurbishing a 250-unit condominium complex at a cost of $4,100,000. It expects that this will lead to expected annual cash flows of $750,000 for the next nine years. What internal rate of return can the firm earn from this project?

A)

10.04%

B)

12.73%

C)

11.33%

D)

13.45%

The WACC for a firm is 12 percent. You know that the firm is financed with $90 million of equity and $110 million of debt. The cost of debt capital is 7 percent. What is the cost of equity for the firm?

A)

13.00%

B)

14.27%

C)

16.67%

D)

18.11%

Fresno Co. has bought some new machinery at a cost of $42,000. The impact of the new machinery will be felt in the additional annual cash flows of $12,000 over the next six years. The firm's cost of capital is 8 percent. What is the discounted payback period for this project? If their acceptance period is five years, will this project be accepted?

A)

5.4 years; yes

B)

3.7 years; no

C)

6.0 years; yes

D)

4.3 years; yes

Profit Real Estate Company is planning to invest in a new development. The cost of the project will be $16 million and is expected to generate cash flows of $6,000,000, $7,000,000, and $7,500,000 over the next three years. The company's cost of capital is 11 percent. What is the internal rate of return on this project? Should the project be accepted?

A) 12.96%. Yes

B) 9.90%. No

C) 16.70%. Yes

D) 8. 21%. No

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Previous Question Next Question

	Safety Company is installing new equipment at a cost of $75,000. Expected cash flows from this project over the next four years will be $25,000, $28,000, $34,000, and $40,000. The company's cost of capital is 9 percent. What is the project's payback period?
			A)		2.65 years
			B)		3.10 years
			C)		3.39 years
			D)		more than 4 years
Smart Consumer Products Co. has issued preferred stock with a $60 par value. The firm pays a quarterly dividend of $.85 on this stock. What is the current price of this preferred stock given a required rate of return of 9percent?
		A)		$37.78
		B)		$50.00
		C)		$54.43
		D)		$62.50
San Jose Property Development Company is refurbishing a 250-unit condominium complex at a cost of $4,100,000. It expects that this will lead to expected annual cash flows of $750,000 for the next nine years. What internal rate of return can the firm earn from this project?
		A)		10.04%
		B)		12.73%
		C)		11.33%
		D)		13.45%
The WACC for a firm is 12 percent. You know that the firm is financed with $90 million of equity and $110 million of debt. The cost of debt capital is 7 percent. What is the cost of equity for the firm?
		A)		13.00%
		B)		14.27%
		C)		16.67%
		D)		18.11%
Fresno Co. has bought some new machinery at a cost of $42,000. The impact of the new machinery will be felt in the additional annual cash flows of $12,000 over the next six years. The firm's cost of capital is 8 percent. What is the discounted payback period for this project? If their acceptance period is five years, will this project be accepted?
		A)		5.4 years; yes
		B)		3.7 years; no
		C)		6.0 years; yes
		D)		4.3 years; yes
Profit Real Estate Company is planning to invest in a new development. The cost of the project will be $16 million and is expected to generate cash flows of $6,000,000, $7,000,000, and $7,500,000 over the next three years. The company's cost of capital is 11 percent. What is the internal rate of return on this project? Should the project be accepted?
		A) 12.96%. Yes
		B) 9.90%. No
		C) 16.70%. Yes
		D) 8. 21%. No