Question: Question 18 Consider two projects: Project A Project B PP 2.8 years 3.0 years IRR 12.5% 13.3% NPV -$15,500 -$16,900 Assume that the projects both

Question 18 Consider two projects:

Project A Project B

PP 2.8 years 3.0 years

IRR 12.5% 13.3%

NPV -$15,500 -$16,900

Assume that the projects both have a required return of 15% and a critical acceptance level (T) of 3.25 years. If these are independent projects we should

Take both projects A and B

Take project B and reject project A

Take neither project

Take project A and reject project B

Question 20 Your firm wants to raise $4924796 by issuing preferred stock. The stock has a par value of $50 and pays a 6% dividend, how many shares must be issued if the required return is 10% (ignore costs associated with issuing the shares known as floatation costs -- round to the nearest share)?

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