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10- Smart Company is considering two investments both of which cost $14,000. The cash...

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Finance

10-

Smart Company is considering two investments both of which cost $14,000. The cash flows for project A in year 1 $2,000. Year 2 $5,000. Year 3 $8,500. While the cash flows for project B are in year 1 $3,000. Year 2 $2,500 and year 3 $9,500. Based on the payback method, which of the two projects should be chosen?

Select one:

a. Project B which has a payback period of 2.98 years.

b. Project B which has a payback period of 2.89 years.

c. Project A which has a payback period of 2.28 years.

d. Project A which has a payback period of 2.82 years.

11-

Stock selling price is $120, an expected dividend is $15 and an expected growth rate is 10% then cost of common stock would be

Select one:

a. 0.522

b. 30.22%

c. 0.225

d. 2.25

14-

The two important components for asset valuation are risk and time.

Select one:

a. False

b. True

15-

Weighted average cost of capital accounts for the cost of preferred stock and common stock.

Select one:

a. False.

b. True.

21-

You invested 15% of your money in security A with a beta of 3.2 and the rest of your money in security B with a beta of 0.25. The beta of the resulting portfolio is

Select one:

a. 0.5773

b. 0.7573

c. 0.6925

d. 73.75

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