10- Smart Company is considering two investments both of which cost $14,000. The cash...
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Finance
10-
Smart Company is considering two investments both of which cost $14,000. The cash flows for project A in year 1 $2,000. Year 2 $5,000. Year 3 $8,500. While the cash flows for project B are in year 1 $3,000. Year 2 $2,500 and year 3 $9,500. Based on the payback method, which of the two projects should be chosen?
Select one:
a. Project B which has a payback period of 2.98 years.
b. Project B which has a payback period of 2.89 years.
c. Project A which has a payback period of 2.28 years.
d. Project A which has a payback period of 2.82 years.
11-
Stock selling price is $120, an expected dividend is $15 and an expected growth rate is 10% then cost of common stock would be
Select one:
a. 0.522
b. 30.22%
c. 0.225
d. 2.25
14-
The two important components for asset valuation are risk and time.
Select one:
a. False
b. True
15-
Weighted average cost of capital accounts for the cost of preferred stock and common stock.
Select one:
a. False.
b. True.
21-
You invested 15% of your money in security A with a beta of 3.2 and the rest of your money in security B with a beta of 0.25. The beta of the resulting portfolio is
Select one:
a. 0.5773
b. 0.7573
c. 0.6925
d. 73.75
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