Should you borrow $1,000 at 5% to purchase a machine that will last two years. Each year the machine will earn you $260 dollars. At the end of the two years you can sell the machine for $500. Show your work and explain.


What are the most relevant considerations in determining what a firm's ideal capital structure is? (define WACC and Modigliani-Miller theorem in your answer)


Using CAPM explain which is your best choice:

Deposit $100 with a risk free 2% investment or medium risk(systematic risk) at 8% or a high risk investment at 15%   Show your work and explain.