Suppose you bought a 11 percent coupon bond one year ago for $840. The bond sells for $885 today.

Requirement 1:

Assuming a $1,000 face value, what was your total dollar return on this investment over the past year?

(Click to select)$45$155$158$169$126

Requirement 2:

What was your total nominal rate of return on this investment over the past year?

(Click to select)20.11%21.96%18.45%14.95%5.36%

Requirement 3:

If the inflation rate last year was 7 percent, what was your total real rate of return on this investment?(Do not round intermediate calculations.)

(Click to select)12.74%-1.54%8.67%9.83%10.70%

You bought one of Great White Shark Repellant Co.s 10 percent coupon bonds one year ago for $790. These bonds make annual payments and mature 6 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 13 percent. If the inflation rate was 3.6 percent over the past year, what was your total real return on investment?

Use the table below to answer this question.

MACRS 5-year property
Year	Rate
1	20.00%
2	32.00%
3	19.20%
4	11.52%
5	11.52%
6	5.76%

Ronnie's Custom Cars purchased some fixed assets two years ago for $95,000. The assets are classified as 5-year property for MACRS. Ronnie is considering selling these assets now so he can buy some newer fixed assets which utilize the latest in technology. Ronnie has been offered $49,500 for his old assets. What is the net cash flow from the salvage value if the tax rate is 34 percent?

Suppose a stock had an initial price of $67 per share, paid a dividend of $1.75 per share during the year, and had an ending share price of $75. Compute the percentage total return.

Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 5 percent, -11 percent, 23 percent, 18 percent, and 13 percent. The average inflation rate over this period was 3.5 percent and the average T-bill rate was 5.6 percent.

Requirement 1:

What was the average real return on Crash-n-Burns stock?(Do not round intermediate calculations.)

(Click to select)6.48%13.44%5.60%5.89%6.19%

Requirement 2:

What was the average nominal risk premium on Crash-n-Burns stock?(Do not round intermediate calculations.)

(Click to select)0.59%3.24%2.84%4.00%3.64%

Use the table below to answer this question.

MACRS 5-year property
Year	Rate
1	20.00%
2	32.00%
3	19.20%
4	11.52%
5	11.52%
6	5.76%

Sun Lee's Furniture just purchased some fixed assets classified as 5-year property for MACRS. The assets cost $50,000. What is the amount of the depreciation expense for the fourth year?

Marshall's & Co. purchased a corner lot in Eglon City five years ago at a cost of $770,000. The lot was recently appraised at $817,000. At the time of the purchase, the company spent $57,000 to grade the lot and another $4,500 to build a small building on the lot to house a parking lot attendant who has overseen the use of the lot for daily commuter parking. The company now wants to build a new retail store on the site. The building cost is estimated at $1,240,000. What amount should be used as the initial cash flow for this building project?

Using the following returns, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y.

	Returns
Year	X	Y
1	7 %	23 %
2	25	44
3	14	-10
4	-15	-24
5	16	52

Requirement 1:
(a)	Calculate the arithmetic average return for X.
	(Click to select)7.61%9.40%11.47%10.62%11.75%

(b)	Calculate the arithmetic average return for Y.
	(Click to select)17.00%13.77%20.74%19.21%21.25%

Requirement 2:
(a)	Calculate the variance for X.(Do not round intermediate calculations.)
	(Click to select)0.0279500.0284120.0223600.0227300.018411

(b)	Calculate the variance for Y.(Do not round intermediate calculations.)
	(Click to select)0.1375000.1016600.1100000.1270750.089100

Requirement 3:
(a)	Calculate the standard deviation for X.(Do not round intermediate calculations.)
	(Click to select)15.08%12.21%14.85%16.72%18.85%

(b)	Calculate the standard deviation for Y.(Do not round intermediate calculations.)
	(Click to select)33.17%31.88%26.86%35.65%41.46%