Question: The average annual return for Tesla from 2014 to 2019 is 10%, with a standard deviation of 10%. What is a 95% confidence interval for
The average annual return for Tesla from 2014 to 2019 is 10%, with a standard deviation of 10%. What is a 95% confidence interval for 2020's returns?
| A. | -10%, 30% | |
| B. | -15%, 25% | |
| C. | -15%, 15% | |
| D. | -5%, 25% |
The Sisyphean Company is considering a new project that will have an annual depreciation expense of $6 million. If Sisyphean's marginal corporate tax rate is 35%, then what is the value of the depreciation tax shield on the company's new project?
| A. | $1,200,000 | |
| B. | $2,100,000 | |
| C. | $1,800,000 | |
| D. | $1,500,000 |
Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It will cost $3 million to buy the machine and $30,000 to have it delivered and installed. Building a clean room in the plant for the machine will cost an additional $2 million. The machine is expected to have a working life of six years. If straight-line depreciation is used, what are the yearly depreciation expenses in this case?
| A. | $658,000 | |
| B. | $705,000 | |
| C. | $505,000 | |
| D. | $153,000 |
Ford has a beta of 1.3. Your estimate of the market risk premium for Ford is 5%. The risk-free rate of return is 2.0%. Based on the Capital Asset Pricing Model (CAPM), what is Ford's expected return?
| A. | 8.5% | |
| B. | 9.6% | |
| C. | 8.0% | |
| D. | 9.2% |
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