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Which one of the following statements is correct if you purchase an item with credit terms of 2/15, net 30?

Corrinne purchased a stock for $63.80 per share, received a dividend of $2.68 per share, and sold the shares for $59.74 each. During the time he owned the stock, inflation averaged 2.8 percent. What was the approximate real rate of return on this investment?

A stock had returns of 2 percent, −23 percent, and 13 percent over the past three years. What is the geometric average return for this time period?

Which of the following are assumptions of the capital asset pricing model (CAPM)? I. A risk-free asset has no systematic risk. II. Beta is a reliable estimate of total risk. III. The reward-to-risk ratio is constant. IV. The market rate of return can be approximated.

FisherCo is intending to invest in a new project. The ________ is the minimum rate of return the firm will accept on this project.

Over the past four years a stock had prices of $12.78, $13.34, $16.30, and $15.40, respectively. The stock pays an annual dividend of $.50 per share. What is the geometric average return on this stock?

Dee’s Toys has a target debt-equity ratio of .62. Its WACC is 11.3 percent and the tax rate is 21 percent. What is the cost of equity if the aftertax cost of debt is 6.3 percent?

Ruba is training her newest coworker, Justin, in the art of project analysis. To get started, Ruba will assign Justin responsibility for analyzing all projects with an initial cost of less than $1,000. Which method is Ruba most apt to ask Justin to employ in making his initial recommendations?

Gateway Communications is considering a project with an initial fixed asset cost of $2.168 million which will be depreciated straight-line to a zero book value over the 10-year life of the project. Ignore bonus depreciation. At the end of the project the equipment will be sold for an estimated $495,000. The project will not directly produce any sales but will reduce operating costs by $634,000 per year. The tax rate is 21 percent. The project will require $128,000 of net working capital which will be recouped when the project ends. What is the net present value at the required rate of return of 14.3 percent?

If the risk-free rate is 2.2 percent, the inflation rate is 1.9 percent, and the market rate of return is 6.8 percent, what is the amount of the risk premium on a U.S. Treasury bill?