1. Find the payback period for the following project: The discount rate is 8%. Project X Initial Outlay $8,440 Year 1 $3,770 Year 2 $3,890 Year 3 $3,660 Year 4 $6,700.
2. You short sell 1000 stocks at $45 per share on margin, and the initial margin is 55%. Later the price of the stocks held short rises to $60 per share, and the stock paid $1.5 dividend per share. What is your holding period return over this period?
3. You short sell 1000 stocks at $55 per share on margin, and the initial margin is 55%. Later the price of the stocks held short rises to $60 per share. What is your margin?