Question: question 2. Ceo has a problem, company just ordered new euqipment and paid 400,000, 30,000 is described as installation cost. CEO needs to talk to

question 2. Ceo has a problem, company just ordered new euqipment and paid 400,000, 30,000 is described as installation cost. CEO needs to talk to tax authority to see if they can teat the 30,000 as tax deductabile expense or as capital investment. The compnay could depreciate the 30,000 over three years. how will the tax authoritydecision affect the NPV of this project. tax rate is 21%. opportinity cost of capital is 15% question

3 James invested 60% in share A and rest in B A B Expected Return 15% 20% Standard dev 20% 22% correlation 0.5 1. what is expected return and standard deviation 2. is the current portfoli better or worse than the one invested half in A and half in B? risk free rate is 5% 3. how would you answer to part A change if correlation coefficent were0, 1, 0r -0.5?

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