Consider a project with an initial outlay of $1,000 and yearly cash flows as follows: -200, -100, 300, 300, 300, 100, 100, 200, 700, 400, and 100. Calculate the classical payback period assuming 10% cost of funds.
A. 8
B. 8.5
C. 9
D. 9.75
If the RTY Corporation follows CAPM and has a beta of 2.0, and the market and risk-free rate of return are 14 and 8 percent, respectively. Obtain the cost of equity capital for the RTY Corporation
A. 6%
B. 14%
C. 20%
D. 22%