1.Write down the equation defining a project's internal rate of return (IRR). In practice how is IRR calculated? 2. You have the chance to participate in a project that produces the following cash flows: Cash Flows (S) CO 8,000 Ci 5,000 C2 14,000 The internal rate of return is 5 percent. If the opportunity cost of capital is 10 percent, would you accept the offer? 3.Calculate WACC. e of Estimate the cost of equity through CAPM. Company's beta is 1.3, market portfolio rate of return is l 7%, risk-free rate of return is 6%. . What is sensitivity analysis? 5. A company X is planning to issue bonds with Face Value of 1000 rubles and annual coupon rate of 8%. Bonds will mature in 5 years, coupons are paid annually. The number of outstanding bonds is 1000 000. Profit tax rate is 20%, what is the cost of this source of capital? 6,construct after-tax cash flows. Working capital is estimated as 25% of sales 3000 360 033033904 400 Raw Material ating Income After T Incoeme x Cash Flows 7. Harold Filbert is 30 years of age and his salary next year will be S20,000. Harold forecasts that his salary will increase at a steady rate of 5 percent per annum until his retirement at age 60 a. If the discount rate is 8 percent, what is the PV of these future salary payments? b. If Harold saves 5 percent of his salary each year and invests these savings at an interest rate of 8 percent, how much will he have saved by age 60