Spring FIN 490D - Financial Analysis Quiz 1: Study Session #10, Corporate Finance (Readings #31-33) 1. The Shidler Corporation is analyzing a project with an estimated cost of 200,000 and a cost of capital of 10%. The cash flows that the project is expected to generate are as follows: Year: Cash Flow: 1 75,000 2 85,000 3 95,000 4 65,000 5 15,000 The discounted payback period for this project is approximately: A. B. C. 2.42 years. 2.86 years. 3.00 years. 2. The following information applies to a company's preferred stock: . . Current price is $47.00 per share Par value is $50.00 per share Annual dividend is $3.50 per share If the company's marginal corporate tax rate is 34 percent, the after-tax cost of preferred stock is closest to: A. B. C. 4.91% 7.00% 7.45% 3. On which of the following statements about the net present value (NPV) and internal rate of return (IRR) methods of capital budgeting would most analysts agree? A Both the NPV and the IRR methods lead to the same accept or reject decision for an individual independent project. Both the NPV and the IRR methods lead to identical ranking of projects. The IRR method is superior to the NPV method. B. C