1. A company is considering an investment of $23,000. They expect the following, sequential cash flows $12,000, $10,000 and $6,000 over a three year period. The company uses a 9% hurdle rate. Considering the discounted payback method should they invest?
2. You buy a stock for $125, receive a dividend of $12 and sell the stock for $95 one year later. What is your dollar and percent return? Later you learn inflation was 5% during the period you owned the stock. What was your real percentage return?