Question

A $1.505.52 $1,067.24 C $1.758.71 D. $1,519 58 E$902.71 14. The Steel Factory is considering a project that will produce annual cash flows of $43,800, $40,200, $46,200, and $41,800 over the next four years, respectively, What is the internal rate of return if the initial cost of the project is $127,900 A. 13.00 percent B. 10.19 percent C. 11.28 percent D. 12.24 percent E 12.83 percent 15. Athletic Corporation is planning a $1.08 million new production facility. This cost will be depreciated on a straight-line basis over a 20-year period. The facility is expected to generate $489,000 in annual sales. Variable costs are 46 percent of sales, the annual fixed costs are $129,400, and the tax rate is 34 percent. What is the operating cash flow for the first year of this project? A. $118,336.82 B. $92,509.15 C $107,235.60 D. $106,666.67 E. $119,323.33 16. A firm is reviewing a project that has an initial cost of $67,000. The project will produce annual cash inflows, starting with Year 1, of $8,000, $13,400, $18,600, $24,100, and finally in Year 5, $37,900. What is the profitability index if the discount rate is 11 percent? A. 0.92 В. 0.98 C. 1.02 D. 1.05 Е. 1.09 17. The next dividend payment by S&S will be $1.38 per share. The dividends are anticipated to maintain a 2.5 percent growth rate, forever. If the stock currently sells for $26.90 per share, what is the required return? A. 8.03 percent B. 7.82 percent E. 9.02 percent C. 7.63 percent D. 8.74 percent End! Page 3 of 3

Answer 1

rate positively .. let me know if you need any clarification..

As per HomeworkLib policy i have provided below answer of first 4 question.. for rest of question please raise new request..

Ans 9
	using DDM we can compute the price
	Price today = Expected dividend next year / (required rate - growth rate)
		=1.62*102.1%/(15.7%-2.1%)
		12.16
	Ans =	option C	12.16
Ans 10	Risk free rate =			6%
	Market risk premium =			6%
	Beta =			1.2
	required rate = Risk free rate + market risk premium * beta
			6%+6%*1.2
			13.20%
	ans = option D)		13.20%
Ans 11	Earning per share =			1.38
	PE ratio =			9.8
	Value of stock = PE ratio * Earning per share
				1.38*9.8
				13.52
	ans = option E =			13.52
Ans 12
	year	Cash flow	Cumulative cash flow
	0	-46700	-46700
	1	10000	-36700
	2	10000	-26700
	3	12000	-14700
	4	12000	-2700
	5	12000	9300
	Payback period =		4+2700/12000
			4.23	year
	ans = option E=		4.23