A project has an initial cost of $7,900 and cash inflows of $2,100, $3,140, $3,800, and $4,500 per year over the next four years, respectively. What is the payback period?

One year ago, you purchased 100 shares of Titan Wood Products for $48.29 per share. The stock has paid dividends of $.55 per share over the past year and is currently priced at $53.18. What is your total dollar return on your investment?

Six months ago, you purchased 1,200 shares of ABC stock for $33.56 a share. You have received dividend payments equal to $.40 a share. Today, you sold all of your shares for $36.70 a share. What is your total dollar return on this investment?

Drinkable Water Systems is analyzing a project with projected cash flows of $127,400, $209,300, and –$46,000 for Years 1 to 3, respectively. The project costs $251,000 and has been assigned a discount rate of 12.5 percent. Should this project be accepted based on the discounting approach to the modified internal rate of return? Why or why not?

A project has cash flows of −$129,000, $62,400, $54,800, and $41,800 for Years 0 to 3, respectively. The required rate of return is 12 percent. Based on the internal rate of return of _____ percent for this project, you should _____ the project.

You want your portfolio beta to be .95. Currently, your portfolio consists of $4,000 invested in Stock A with a beta of 1.26 and $7,000 in Stock B with a beta of .94. You have another $8,000 to invest and want to divide it between an asset with a beta of 1.74 and a risk-free asset. How much should you invest in the risk-free asset?

A proposed project has fixed costs of $42,106 per year. The operating cash flow at 12,000 units is $56,900. Ignore taxes. What will be the new degree of operating leverage if the number of units sold rises to 12,600?

Bretz Baskets would like to offer a special product to its best customers. However, the firm wants to limit its maximum potential loss on this product to the firm’s initial investment. The fixed costs are estimated at $3,600, the depreciation expense is $870, and the contribution margin per unit is $6.89. What is the minimum number of units the firm should pre-sell to ensure its potential loss does not exceed the desired level?

Home & More is considering a project with cash flows of −$368,000, $133,500, −$35,600, $244,700, and $258,000 for Years 0 to 4, respectively. Should this project be accepted based on the combination approach to the modified internal rate of return if both the discount rate and the reinvestment rate are 14.6 percent? Why or why not?

A project will produce cash inflows of $5,400 per year for 3 years with a final cash inflow of $2,400 in Year 4. The project’s initial cost is $13,400. What is the net present value if the required rate of return is 14.2 percent?