1. Suppose a project is expected to generate annual cash flow of $163513×1.25 next year, $163513×1.25×1.25 (i.e. 163513 × 1.25 squared) the year after, and the subsequent (annual) cash flows are expected to grow at 2.7 percent annually.forever. If project costs $560,000 and the cost of capital is 15.2 percent, calculate the net present value of the project.
2. Hubbard Industries just paid a common dividend, D0, of $1.60. It expects to grow at a constant rate of 2% per year. If investors require a 12% return on equity, what is the current price of Hubbard's common stock? Round your answer to the nearest cent. Do not round intermediate calculations.