MUST SHOW FORMULAS Chapter 9 and 13 - Master it! Solution (Please fill in...

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Finance

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Chapter 9 and 13 - Master it! Solution (Please fill in the highlighted cells in light blue.) 1. Suppose we have a project with the following cash flows and required return. What is the NPV and IRR of the project? 4 0 $ 1 2 3 4 5 6 7 Cash flow (250,000) 41,000 48,000 63.000 79,000 88,000 64,000 41,000 Return: 12% NPV: IRR: 2. Given the information of Stock A, please figure out the expected return, variance, and standard deviation of the stock. (5) Return Deviation (6) (1) (2) (3) (4) from Expected Squared Return (7) State of Probability of Return if State Product Return Devotion from Product Economy Stote Occurs (2) (3) (3) - E(R) Expected Return (2) (6) Boom 0.2 0.24 Normal 0.5 0.11 Recovery 0.2 0.02 Recession 0.1 -0.013 Expected return Variance = The standard deviation is the square root of the variance, so the standard deviation is: Standard deviation

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