1. A project has an initial cost of $148,400 and is expected to produce cash inflows of $56,500, $69,540, and $97,867 over the next three years, respectively. What is the discounted payback period if the required rate of return is 10 percent?
A. 2.12 years B. 2.54 years C. 2.91 years D. 1.88 years
2. The Dry Dock is considering a project with an initial cost of $411,400. The project's cash inflows for years 1 through 5 are $67,200; $74,600; $101,279; $228,600; and $196,900, respectively. What is the IRR of this project?
A. 15.44 percent. B. 16.03 percent. C. .71 percent. D. 14.89 percent.
3. A company just paid an annual dividend of $4.00 per share last week. The dividend is expected to grow at 25 percent per year for three years. Thereafter, the dividend will grow at 4 percent per year in perpetuity. If the appropriate discount rate is equal to 11 percent, what is the price of the company's stock today?
A. $100 B. $90 C. $105 D. $95