1. A hospital’s project has the following expected cash flows Year Cash flow 0 ($5,000) 1 $1,000 2 $2,000 3 $3,000 If the cost of capital is 12%, should the project be undertaken? Show your calculations
2. What is the value of a 9-month call with a strike price of $52.5 given the Black-Scholes option pricing model and the following information? Stock price $54.5 Risk-free rate 5 percent Standard deviation 47 percent N(d1) .650807 N(d2) .492209
3. Assuming you want to be a Real Estate Broker, what types of things would be important to you in choosing a broker, and why?