please give brief reasoning

QUESTION 11.

Multiple Choice. At an interest rate of 10%, which of the following cash flows should you prefer?

A. Option A B. Option B C. Option C D. Option D

	Year 1	Year 2	Year 3
A)	500	300	100
B)	100	300	500
C)	300	300	300
D)	Any of the above as they all add up to $900

QUESTION 12.

Multiple Choice.

After retirement, you expect to live for 25 years. You would like to have $75,000 income each year. How much should you have saved in the retirement to receive this income, if the interest is 9% per year (assume that the payments start one year after the retirement)?

A. $736,693.47 B. $6,352,567.22 C. $1,875,000 D. None of the above

QUESTION 15.

Multiple Choice.

The graphical representation of CAPM (Capital Asset Pricing Model) is called:

A. Capital Market Line B. Characteristic Line C. Security Market Line D. None of the above

QUESTION 17.

Multiple Choice. The company cost of capital is the appropriate discount rate for a firm's:

A. low risk projects B. high risk projects C. average-risk projects D. all of the above

QUESTION 18.

Multiple Choice.

The market value of Charter Cruise Company's equity is $15 million, and the market value of its risk-free debt is $5 million. If the required rate of return on the equity is 20% and that on the debt is 8%, calculate the company's cost of capital. (Assume no taxes.)

A. 20% B. 17% C. 14% D. None of the above

QUESTION 19.

Multiple Choice. The after-tax weighted average cost of capital (WACC) is calculated using the formula:

A. WACC = (rD) (D/V) + (rE) (E/V) where: V = D + E B.WACC=(rD)(1-TC )(D/V)+(rE)(E/V)where:V=D+E C. WACC = (rD) (D/E) + (rE) (E/D) D. none of the above

QUESTION 20.

Multiple Choice. The payback period rule accepts all projects for which the payback period is:

A. Greater than the cut-off value B. Less than the cut-off value C. Is positive D. An integer