1. The initial investment is $65,000 with an annual cash inflow of $12,000 for 9 years and the discount rate is 9%. What is the projects discounted payback?
2. In the sustainable growth rate model, what is R, the retention rate? What is the effect on sustainable growth rate as R goes up or down? Give a numerical example using some numbers (which you will need to make up) that shows how R is calculated.
3. Income Statement Barnyard, Inc.'s 2008 income statement lists the following income and expenses: EBIT = $505,500, Interest expense = $46,000, and Taxes = $157,500. Barnyard's has no preferred stock outstanding and 150,000 shares of common stock outstanding. What are its the 2008 earnings per share? (Round your answer to 2 decimal places.)