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Project A has a $5,000 net present value at a zero discount rate and an internal rate of return of 12%. Project B has an $8,000 net present value at a 0% discount rate and an IRR of return of 10%. If the projects are mutually exclusive, which one should be chosen?

An issue of common stock is expected to pay a dividend of $4.00 at the end of the year. Its growth rate is equal to 8%. If the required rate of return is 15%, what is its current price?

A 4-year bond pays 4% annual interest (paid semi-annually). It currently sells for $872.25. What is the bond’s yield to maturity?

Laura’s Book Shoppe is going to borrow $50,000 for 90 days at an annual rate of 9%. The amount of interest owing in 90 days will be:

The major drawback for viewing dividends as a passive variable is that shareholders likely have some preference related to dividend payments.

A 20-year bond pays 12% on a face value of $1,000. If similar bonds are currently yielding 9%, what is the market value of the bond?

Risk is not only measured in terms of losses, but also in terms of variability.

Average daily remittances are $5 million, and “extended disbursement float” adds 3 days to the disbursement schedule, how much should the firm be willing to pay for a cash management system if the firm earns 10% on excess funds.

Cash, accounts receivables, and inventory all move monthly in the same direction under level production.

 The Milling Corp. has developed a new type of widget. The local distributor expects to increase his sales by 20% over the past year due to this new development. Last year’s sales were $50,000 at a selling price of $100 per unit. The manager would like to cut costs as much as possible and comes to you for advice. Total ordering cost is $100 per order. Carrying cost is $5 per unit.   Access Excel here.A) What is the economic order quantity? (2 MARKS) B) What is the amount of average inventory? (1 MARK) C) How many orders will be made per year? (1 MARK) D) What is the total cost of this inventory decision? (2 MARKS)