You just won the lottery and want to put some money away for your child’s college education. College will cost $80,000 in 15 years. You can earn 4% compounded annually. How much do you need to invest today, assuming you make a one-time investment?

Calculate the NPV of the following project using a discount rate of 5%:       Yr 0 = –$800; Yr 1 = –$80; Yr 2 = +$200; Yr 3 = +$300; Yr 4 = +$500; Yr 5 = +$500

A firm’s _____ tax rate is defined as the tax amount divided by the taxable income.

In order to help you through college, your parents just deposited $25,000 into a bank account paying 5% interest. Starting tomorrow, you plan to withdraw equal amounts from the account at the beginning of each of the next four years. What is the MOST you can withdraw annually?

Given the following information, what is the firm’s weighted average cost of capital? Market value of equity = $60 million; market value of debt = $20 million; cost of equity = 15%; cost of debt = 5%; equity beta = 3.1; tax rate = 35%.

An investment earned the following returns for the last four years: –30%, +28%, +15%, and +7%. What is the variance of returns for this investment?

You have discovered from looking at news announcements on the Wall Street Journal website that if you buy the stock of a firm on the day the firm announces that it has higher than expected earnings, you make money every time in the following week! This is clearly a violation of the _____ of market efficiency.

A project requires an initial investment of $9 million. The target D/E ratio is 0.60. Flotation costs for equity are 7% and flotation costs for debt are 3%. What is the true cost (in dollars) of the project when you consider flotation costs?

What is the market value of a bond that will pay a total of ten semi-annual coupon payments of $70 each over the remainder of its life? Assume the bond has a $1,000 face value and a 6% yield to maturity (APR).

What is the future value at the end of year 4 of the following set of cash flows? Assume an interest rate of 7%. Year                                 1                2                3                4          Cash Flow                    +$900         -$900         +$800           -800