Today, you sold 3500 shares of SLG stock for a total of $200,060 after receiving dividends of $12,145. Last year, you purchased the stock for $53.30. What is your total rate of return on this investment? A. 11.92 percent B. 11.44 percent C. 12.36 percent D. 13.75 percent
Walks Softly sells customized shoes. Currently, it sells 21,000 pairs of shoes annually at an average price of $68 a pair. The company is considering adding a lower-priced line of shoes that will sell for $29 a pair. Walks Softly estimates it can sell 11,000 pairs of the lower-priced shoes but will sell 1,500 less pairs of the higher-priced shoes by doing so. What is the amount of the sales that should be used when evaluating the addition of the lower-priced shoes? A. $319,000 B. $217,000 C. $267,000 D. $191,000
Webster's wants to introduce a new product that has a startup cost of $56,000. The product has a 2-year life and will provide cash flows of $42,700 in Year 1 and $26,300 in Year 2. The required rate of return is 12 percent. Should the product be introduced? Why or why not? A. No; the IRR is 11.09 percent B. Yes; the IRR is 16.55 percent C. Yes; the NPV is $5,872 D. No; the P.I. is 0.86