1. Alyeska Salmon Inc., a large salmon canning firm operating out of Valedz, Alaska, has a new automated production line project it is considering. The project has a cost of $275. And after-tax annual cash flows of $73,360 for 8 years. The firm's management is uncomfortable with the IRR reinvestment assumption and prefers the modified IRR approach, you have calculated a reported rate of return for the firm of 12 percent. What is the project's MIRR?
2. Arizona Rock, an all-equity firm, currently has a beta of 1.25. and rRF= 7%, and rM= 14%, suppose the firm sells 10 % of its assets (beta=1.25)and purchases the (rest ? ) percent of assets with a beta of 1.1. what will be the firm's new overall required rate of return, and what rate of return must the new assets produce in order to leave the stock price unchanged ?