Systems International's (SI) stock closed at $15 at the end of trading for the day. Before the markets opened the next day, SI issued a press release announcing they won a large computer consulting project.The company's stock opened the following day at $16.50. The company has 150 million shares outstanding.What is your best estimate of the consulting project's NPV?

Question 10 options:

a. $2,250 million

b. Insufficient information to estimate the NPV

c. $2,475 million

d. $225 million

The BangBang Drum Company recently raised several million dollars in an initial public offering.BangBang received $22 per share from the underwriter, the offering price was $25 per share, and the market price rose to $28 on the first day of trading.The initial return investors earned on the stock was _______.

Question 13 options:

30%

24 %

13.6%

27.3%

12%

Question 14(2 points)

Consider an asset with an initial cost of $100,000 and no salvage value. Compute thedifferencein the present value of the tax shields if CCA is calculated at 20% declining balance compared to if CCA is calculated using a five year, straight line write off.For the purpose of your calculation use 30% as the tax rate and 16% as the required return.Thedifference, to the nearest dollar, is

Question 14 options:

$1,724

$9,517

$49,969

$4,129

$4,483

Question 15(2 points)

A firm is considering Projects S and L, whose cash flows are shown below. These projects are mutuallyexclusive, equally risky, and not repeatable. The CEO wants to use the IRR criterion, while the CFO favours the NPV method, and you were hired to advise the firm on the best procedure. If the CEO's preferred criterion is used, how much value will the firm lose as a result of this decision?

WACC: 13.00%

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