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12 Traffic shock wave. An abrupt slowdown in concentrated traf- fic can travel as a pulse, termed a shock wave, along the line of cars, either downstream (in the traffic direction) or upstream, or it can be stationary. Figure 2-17 shows a uniformly spaced line of cars moving at speed y = 25.0 m/s toward a uniformly spaced line of slow cars moving at speed y, = 5.00 m/s Assume that each faster car adds length L = 120 m (car length plus buffer zone) to the line of slow cars when it joins the line, and assume it slows abruptly at the last instant. (a) For what separation distance d between the faster cars does the shock wave remain stationary? If the separa- tion is twice that amount, what are the (b) speed and (c) direction (upstream or downstream) of the shock wave? You have run a regression of Google returns against returns on the S&P500 and the sequation was as follows Ratums Google = 0.0002 +0.85 (ReturnsS&P500) R2=0.75, the standard error for the beta stimate is 03 You also note that the average unlevered beta for comparable time in 14. Google's debt-to-equity ratio 30%. T-bondi rate is 0.045 and the equity risk premium is 0.075 and Google AA rate bond default spread 0.01 Tac rate 16 Please write your answers in de climats You are deciding to choose between two mutually exclusive projects a. option1: project X will cost $6,000 to install and $3200 a to run year .and will last for three years b. option 2: project will cost $7,000 to install and $2900 a to run year .and will last for four years Let the WACC = 0.07 .Estimate the NPV of project X .Estimate the equivalent annuity cost of project X .Estimate the NPV of project Y Estimate the Equivalent annuity cost of project Which option would you choose option 1 or 2

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