Given the following information and assuming straight-line depreciation to zero, what is the profitability index for this project? Initial investment = $80,000; life = 5 years; operating cash flow = $25,000 per year; salvage value = $10,000 in year 5; tax rate = 35%; discount rate = 10%.

An investment’s present value benefits are exactly equal to the invested costs at a discount rate of 8%, indicating that the project breaks even at that rate.  The 8% is most likely the project’s:

In a financial market someone who brings together buyers and sellers of equity securities but who does not maintain an inventory is called a(n):

How much would you pay for a share of ABC Corporation stock today if the dividend in one year will be $3 per share, your required return on equity investments is 10%, and the stock is expected to be worth $90 one year from now?

Terry’s T-shirts makes hand-painted T-shirts for distribution to upscale retail outlets. The firm is currently considering making hand-painted shorts as well. Which one of the following is the best example of an amount that would be included in the “incremental operating cash flow” related to the hand-painted shorts project?

Dizzy Corp. bonds bearing an annual coupon rate of 8%, pay coupons semi-annually, have 3 years remaining to maturity, a $1,000 face value, and are currently priced at $990 per bond. What is the yield to maturity as an annual stated rate (APR)?

You presently own stock that you purchased one year ago. Your nominal return on the stock for the past year was 15%. You calculate your real return on investment as 11.50%. According to the “Fisher Effect” formula, the rate of inflation must have been _____.

Etling Inc. is expected to pay a $2 dividend in one year and a $3 dividend in two years. The dividends are expected to grow at a 5% growth rate after that forever. If the required return is 14%, what is the price of the stock?

A firm has 1,500,000 shares outstanding. If 5 directors will be elected, how many shares do you need to control to assure yourself a seat on the board under cumulative voting procedures?

Today, the bond market requires a return of 7% on the 5-year bonds issued by Action Corporation. The 7% percent is referred to as