1. 8 years ago you started making annual deposits of $477 into an account paying 8% annual return. You continue to make these deposits every year without fail. If you keep doing this every year for the next 9 years, how much money will you have in 9 years?
2. Using everything you know about capital budgeting, if the two projects are mutually exclusive, which project or projects should the firm undertake? Explain in full. The answer must be complete. Substantiate with numbers.
3. Humana Inc. paid a dividend on common stock of $2.00 last year. Over the next years, the dividend is expected to growth at 8%, which is the constant growth rate for the firm. The required return on common stock is 10%. Compute the current fair price of the stock.