DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $300,000 in year two, $150,000 in year three, and $180,000 in year four. DYI's required rate of return is 8%. What is the payback period of this project?

Group of answer choices

a) 2.50 years

b) 4.00 years

c) 3.09 years

d) 2.67 years

The risk-free rate of return is 2.5% and the market risk premium is 8%. Rogue Transport has a beta of 2.2. Using the capital asset pricing model, what is Rogue Transport's cost of retained earnings?

Group of answer choices

a) 19.6%

b) 20.1%

c) 16.4%

d) 17.7%