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# Ques 41: The beta of Microsoft's stock is 1.2, whereas the risk-free rate of return is 4 percent. Assume that the expected return on the market is 16...

Ques 50: Bailey Company is considering developing a new iPhone app.  The cost of development is expected to be \$750,000 (all incurred in time zero) and management expects net cash flows from sale of the app to be \$100,000 in year one and \$150,000, \$225,000, \$250,000, \$280,000 and \$300,000 in years two through six, respectively. What is the Net Present Value of this project if the discount rate is 12%?
\$88,764
\$838,764
\$555,000
\$1,305,000

Ques 41: The beta of Microsoft’s stock is 1.2, whereas the risk-free rate of return is 4 percent. Assume that the expected return on the market is 16 percent. Then, what is the expected return on Microsoft stock? A. 8.80% B. 28.00% C. 18.40% D. 23.20% Ques 42: If you have a 3 year loan that requires \$1,000 payments each year at 7% annual interest rate what would be the present value of the loan? A. \$2,624.32 B. \$3,000.00 C. \$3,210.00 D. \$2,803.74 Ques 43: Robert has a mortgage on his home of \$400,000 and has a fixed rate mortgage of 6.125% for 30 years. What would his monthly payments be for this loan? A. \$2,041.67 B. \$2,596.55 C. \$2,430.45 D. \$2,788.46 Ques 44: What is the effective annual interest rate? A. The simplest interest rate charged.
B. Rate that reflects compounding. C. Rate with bank fees included. D. Interest rate quoted by banks. Ques 45: Stern Associates is considering a project that has the following cash flow data. What is the project's payback? Year 0 1 2 3 4 5 Cash flows -\$1,100 \$300 \$310 \$320 \$330 \$340 A. 2.31 years B. 2.56 years C. 2.85 years D. 3.16 years E. 3.52 years Ques 46: Oranges Inc. is considering a project that has the following cash flow and Cost of Capital data. What is the project's discounted payback? Cost of Capital: 10.00% Year 0 1 2 3 4 Cash flows -\$950 \$525 \$485 \$445 \$405 A. 1.61 years B. 1.79 years C. 1.99 years D. 2.22 years E. 2.44 years Ques 47: Maxwell Food is considering a project that has the following cash flow data. What is the project's IRR? Year 0 1 2 3 4 5
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