1. Citigroups p-e ratio is 10x, while J. P. Morgans p-e ratio is 12.6x. If you believe Citigroup has equal prospects for future eps growth, which stock would you buy?

2. Calculate the NPV for the following project where the WACC is 6%: $100 invested today and after-tax returns of $20 at the end of Year 1, $34 at the end of Year 2, and $33 at the end of years 3 and 4. (First draw a timeline.)

3. If Microsoft is considering investing $1 billion in new offices, and the NPV is calculated to be +$1, and the WACC is 7.4%, what is your approximate estimate for the IRR? (No calculations needed.)