Problem 10-17 Return Distributions [LO 3]

Consider the following table for the total annual returns for a given period of time.

Series	Average return		Standard Deviation
Large-company stocks	11.7	%	20.6	%
Small-company stocks	16.4		33.0
Long-term corporate bonds	6.1		8.8
Long-term government bonds	6.1		9.4
Intermediate-term government bonds	5.6		5.7
U.S. Treasury bills	3.8		3.1
Inflation	3.1		4.2

What range of returns would you expect to see 95 percent of the time for long-term corporate bonds? (A negative answer should be indicated by a minus sign. Input your answers from lowest to highest to receive credit for your answers. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Expected range of returns % to %

What about 99 percent of the time? (A negative answer should be indicated by a minus sign. Input your answers from lowest to highest to receive credit for your answers. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Expected range of returns % to %

Problem 10-19 Calculating Returns and Variability [LO 1]

You find a certain stock that had returns of 15.4 percent, 22.7 percent, 28.7 percent, and 19.7 percent for four of the last five years. Assume the average return of the stock over this period was 13.4 percent. What was the stocks return for the missing year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Stock's return %

What is the standard deviation of the stocks returns? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Standard deviation %

Problem 9-24 Project Analysis [LO 2]

McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $731 per set and have a variable cost of $361 per set. The company has spent $151,000 for a marketing study that determined the company will sell 75,100 sets per year for seven years. The marketing study also determined that the company will lose sales of 8,600 sets per year of its high-priced clubs. The high-priced clubs sell at $1,210 and have variable costs of $550. The company will also increase sales of its cheap clubs by 11,100 sets per year. The cheap clubs sell for $341 and have variable costs of $126 per set. The fixed costs each year will be $11,210,000. The company has also spent $1,010,000 on research and development for the new clubs. The plant and equipment required will cost $24,570,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $1,510,000 that will be returned at the end of the project. The tax rate is 35 percent, and the cost of capital is 15 percent.

Calculate the payback period, the NPV, and the IRR. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter your IRR answer as a percent.)

Payback period		years
Net present value	$
Internal rate of return		%