## ABC Company is considering an investment that will cost the company $468 at

QUESTION 2ABC Company is considering an investment that will cost the company $468 at . The after-tax cash flows are expected to be $116 each year for 14 years. What is the payback period?Enter your answer rounded off to two decimal points.QUESTION 4ABC Inc. is considering an investment of $1,750 million with after-tax cash inflows of $332 million per year for six years and an additional after-tax salvage value of 87 million in Year 6. The required rate of return is 8%. What is the investmentâs Profitability Index (PI)?Enter your answer rounded off to two decimal points.QUESTION 5What is the project’s initial investment outlay based on the following information: The machinery could be purchased for $28,412. Shipping and installation costs would cost another $6,659. The project would require an initial investment in net working capital of $3,203. The company’s tax rate is 30%.Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.QUESTION 6ABC Company purchased a new machinery 4 years ago for $64,613. Today, it is selling this equipment for $13,284. What is the after-tax salvage value if the tax rate is 24 percent?The MACRS allowance percentages are as follows, commencing with year one: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent.Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.QUESTION 7Over the past six years, a stock had annual returns of 10 percent, 5 percent, 7 percent, 8 percent, 2 percent, and -11 percent, respectively. What is the standard deviation of these returns?Enter your answer as a percentage rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box.QUESTION 8You have a $56,327 portfolio that consists of $15,897 invested in Stock A, $14,357 invested in Stock B, $5,667 invested in Stock C, and the remainder in Stock D. The portfolio has a return of 15.5 percent. The return for Stock A is 10.6 percent, for Stock B is 23.2 percent, and for Stock C is 6.7 percent. What is the return for Stock D?Enter your answer as a percentage rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box.zQUESTION 9A 12-year project is expected to generate annual sales of $174,653, variable costs of $43,580, and fixed costs of $39,515. The annual depreciation is $28,961 and the tax rate is 27 percent. What is the annual operating cash flow?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.QUESTION 10Suppose the nominal rate is 14.37% and the inflation rate is 2.37%. Solve for the real rate. Use the Fisher Effect formula.Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.QUESTION 11The risk-free rate is 5.6%, the market risk premium is 11.5%, and the stockâs beta is 0.24. What is the required rate of return on the stock, E(Ri)?Use the CAPM equation.Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.QUESTION 12A project has an initial requirement of $86,120 for equipment. The equipment will be depreciated to a zero book value over the 5-year life of the project. The investment in net working capital will be $12,573. All of the net working capital will be recouped at the end of the 5 years.The equipment will have an estimated salvage value of $18,597. The annual operating cash flow is $54,192. The cost of capital is 13 percent. What is the projectâs net present value if the tax rate is 23 percent?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.QUESTION 13Five years ago, ABC Company invested $53,828 million in a machinery. The investment in net working capital was $7,704 which would be recovered at the end of the project. Today, ABC Company is selling the machinery for $17,364 million. The book value of the machinery is $21,537 million. The tax rate is 39 percent. What are the terminal cash flows in Year 5?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.QUESTION 14Based on the following information, what is the portfolio beta?.9px;=”” 12px=””>StockValueBetaA$6,2760.82B$7,7621C$49,0581.72D$6,5412.27Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.QUESTION 15ABC Company is considering a new project. The project is expected to generate annual sales of $95,693, variable costs of $23,733, and fixed costs of $24,775. The depreciation expense each year is $16,007 and the tax rate is 36 percent. What is the annual operating cash flow?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.QUESTION 16You have invested $41,330 portfolio in three securities. The three securities comprise of the risk-free asset, Stock A, and Stock B. The beta of stock A is 2 while the beta of stock B is 0.6. 26% of the portfolio is invested in the risk-free security. What is the dollar amount invested in stock B if the beta of the portfolio is 1.1?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.QUESTION 17What is the NPV of this project if the required rate is 8%?Year CF0 -$1,0261 $1,1252 $1,6713 $1,248Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.QUESTION 18What is the Profitability Index (PI) of this project if the required rate is 18%?Year CF0 -$2,0941 $1,2592 $1,7003 $1,6724 $4975 $967Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.QUESTION 19One year ago, you puchased 149 shares of ABC stock for $39.13 per share. During the year, you received a dividend of $9.03 per share. Today, you sold all your shares for $56.38. What are the percentage return on your investment?Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.QUESTION 20ABC Company purchased a 3-year MACRS property for $42,822 2 years ago. What is the current book value of this equipment?The MACRS allowance percentages are as follows, starting with year one: 33.33, 44.45, 14.81, and 7.41 percent.Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.QUESTION 22A project requires $5,114 of equipment that is classified as a 7-year property. What is the depreciation expense in Year 2 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent?Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.QUESTION 23ABC has issued a $1000 par bond with 15 years to maturity. The bond is currently quoted at 116.5% of par value. The bond pays a semi-annual coupon of $63, and a maturity of five years. What is the current yield?Enter your answer as a percentage rounded off to TWO decimal points.QUESTION 24ABC Company has 6 percent bonds outstanding that mature in 13 years. The bonds can be called in 3 years at a call price of $1150. The bonds pay interest semiannually and have a face value of $1,000. Currently, the bonds are selling for $993 each. What is the yield to call (YTC)?Enter your answer in percentages rounded off to two decimal points.QUESTION 25Project A requires an initial investment of $5,000 at t = 0. Project A has an expected life of 4 years with cash inflows of $2,000, $2,500, $1,500, $1,500 at the end of Years 1, 2, 3, and 4 respectively. The project has a required return of 12%. What is the equivalent annual annuity?Enter your answer rounded off to two decimal points.QUESTION 26What is the internal rate of return (IRR) of this project?Year CF0 -$3,5001 $ 1502 $1,4003 $2,0004 $ 4005 $ 790Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box

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