Suppose you buy a share for $100 and expect that the price next year will be: $115 with a probability of 25% $105 with a probability of 45% $95 with a probability of 30%. Assuming that the stock pays no dividend for the next year, then the expected return on your investment expressed as a percentage to 2 decimal places is: Select one: a. 4.50% b. 5.19% c. 5.00% d. 8.75% Which of the following considered to be a contingent project? Select one: a. Expanding the size of a warehouse and purchasing stock. b. Planning an expansion of business accommodation and the purchase of a state of the art piece of machinery. c. Choosing between two brands of computer networking. d. Planning an oil refinery and a pilot study searching for oil. Consider the capital budgeting decision to be made with the following data about 2 competing projects. Project A has an NPV of $12 500, and IRR of 10% and a payback period of 3 years. Project B has an NPV of $12 000, but an IRR of 13% and a payback period of 2 years 10 months. Which project(s) would be chosen on a mutually exclusive basis? Select one: a. Project A and Project B b. Project A c. Neither Project A nor Project B d. Project B To make provision for the possible impact of recessions in the future, Bunbury Mutual Bank would like to set up a reserve fund. The fund will earn an interest rate of 7% per annum. If the fund pays a fixed amount of $13 million to the bank annually for an infinite period, starting three years from today and the annual payment grows at 2.5% annum, how much does the bank need in the fund today? Select one: a. $270.0 million b. $220.4 million c. $252.3 million d. $235.8 million Three years ago, Betty deposited $12,000 into an account at Wagga Wagga Mutual Bank that pays an interest rate of 7% per annum, compounded half-yearly. The accumulated balance five years from now will be Select one: a. $20,807.83 b. $20,618.23 c. $21,978.04 d. $21,325.80