1)

2)

Please READ BOTH questions CAREFULLY and answer BOTH questions CORRECTLY. NOTE that for question 1, 9.00% is an INCORRECT answer, and for question 2, 4.00% is an INCORRECT answer. Please DOUBLE CHECK your work BEFORE posting the solution. Any WRONG OR MISSING answers will be DOWNVOTED. Thank you!

Estimate a venture's required rate of return based on the following information: terminal value =$400,000; current year's net income =$20,000; next year's expected cash flow =$25,000; and constant growth rate =7%. a) 13.25% b) 7.50% c) 10.75% d) 9.00% Estimate a venture's constant growth rate (g) based on the following information: terminal value =$400,000; current year's net income =$20,000; next year's expected cash flow =$25,000; and required rate of return =20%. a) 4.00% b) 13.25% c) 7.75% d) 15.50%