3. Calculating Payback. Global Toys Inc., imposes a payback cutoff of three years for its
international investment projects. If the company has the following two projects available,
should it accept either of them?
Cash Flow (A)
4. Portfolio Expected Return. You have $10,000 to invest in a stock portfolio. Your choices are Stock X with
an expected return of 14 percent and Stock Y with an expected return of 11 percent. If your goal is to
create a portfolio with an expec
16. Both Bond Bill and Bond Ted have 7 percent coupons, make semiannual payments, and are priced at
par value. Bond Bill has 3 years to maturity, whereas Bond Ted has 20 years to maturity. If interest rates
suddenly rise by 2 percent, what is th
8. Calculating the Number of Periods. Calculating Rates of Return. In 2011, an 1880-O Morgan
silver dollar sold for $13,113. What was the rate of return on this investment?
Chapter 2 Questions
8. Hammett, Inc., has sales of $34,630, costs of $10,340, depreciation expense of $2,520, and interest
expense of $1,750. If the tax rate is 35 percent, what is the operating cash flow, or OCF?
Operating cash flow $ 17283
Sales - Cost