A)
Find the Payback period for the following project:
Project X Initial Outlay $8,960
Year I $3,030
Year 2 $3,800
Year 3 13,740
Year 4 $6,010
The answer should be calculated to two decimal places.
B)
Find the net present value for the following series of future cash flows, assuming the company’s cost of capital is 8.86 percent the initial outlay is $471,338
Year 1 : 176980
Year 2 : 152,444
Year 3 : 197,804
Year 4 :136,682
Year 5 : 168,913
C)
a project has initial outlay of $2593. It has a single cashflow at the end of year 10 of $5431. What is the IRR of the project?
D)
Find the profitability index for the following series of future cashflows assuming the company’s cost of capital is 8.33 percent the initial outlay is $467,184
Year 1: $160,540
Year 2: $132,403
Year 3 : $126,369
Year 4 : $ 175825
Year 5 : $196,059
E)
Black hill inc. sells $100 million worth of 24 year to maturity 13.75% annual coupon bonds. The net proceeds (after floatation cost ) are $ 974 for each $1000 bond. What is the before tax cost of capital for this debt financing?
F)
Calculate the cost of new common equity financing of stock Q using Gordon model

Last year dividend 
Growth rate of dividend 
Selling price of stock 
Floatation cost 
Cost of common stock 
Stock Q 
$4.17 
4% 
$40.12 
$4.43 
? 
G)
Given the following information on Big Brothers inc. capital structure, compute the company’s weighted average cost of capital (WACC) the company’s marginal tax rate is 40%
Type of capital 
Percent of capital structure 
Before tax component cost 
Bond 
56%

8.19% 
Preferred stock 
13% 
13.77% 
Common stock 
Please calculate it 
12.21% 