4) 5) 6) Suppose you have the following investment opportunities, but only $120,000 available for investment....

 

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4) 5) 6) Suppose you have the following investment opportunities, but only $120,000 available for investment. Which projects should you take? Project 1 2 3 4 5 6 NPV 7,500 7,500 15,000 22,500 22,500 4,500 Investment 15,000 7,500 135,000 90,000 112,500 22,500 On the normal curve, what is the approximate number of observations that fall in the 1st, 2nd and 3rd standard deviations? What does the variance tell us about a stock's returns? Suppose that the market return is 13.3% per year and the risk free rate averaged 4%. The risk free rate is now 5%. You are considering a project with the same risk as the market. What should its discount rate be? 4) 5) 6) Suppose you have the following investment opportunities, but only $120,000 available for investment. Which projects should you take? Project 1 2 3 4 5 6 NPV 7,500 7,500 15,000 22,500 22,500 4,500 Investment 15,000 7,500 135,000 90,000 112,500 22,500 On the normal curve, what is the approximate number of observations that fall in the 1st, 2nd and 3rd standard deviations? What does the variance tell us about a stock's returns? Suppose that the market return is 13.3% per year and the risk free rate averaged 4%. The risk free rate is now 5%. You are considering a project with the same risk as the market. What should its discount rate be?

Answer rating: 100% (QA)

To determine which projects should be taken we can calculate the profitability index PI for each pro... View the full answer