6. When evaluating two mutually come the no mutually exclusive investments, the best method to use A) Simple payback period B) IRR C) NPV D) All of the above methods 7. A project requires a cost of $39.00 project requires a cost of $39.400 today and yields cash flows for 3 years as follows. When will the project pay back? Year Cash Flow$12.800 $21,800 $10,000 A) between 1 to 2 B) between 2 to 3 C) This investment never pays back Beta 1.48 1.13 8. What is the beta of the following portfolio? Stock Value $21,600 13,000 46.000 19.800 A) 1.13 B) 1.15 C) 1.17 D) 1.21 E) 1.23 0.99 1.08 9. Based on the pecking order theory of capital structure, which is the way of financing that firms normally choose first? A) Using retained earnings B) Borrow money from banks C) Sell stocks to the public D) Sell bonds to the public 10. Wagner Inc estimates that its average-risk projects have a WACC of 10%, its below- average risk projects have a WACC of 8%, and its above-average risk projects have a WACC of 12%. Which of the following projects (A, B, and C) should the company accept? Project A is of average risk and has a return of 11%. Project B is of below-average risk and has a return of 7.5%. C) Project C is of above-average risk and has a return of 11%. D) None of the projects should be accepted. E) All of the projects should be accepted