2. a) Calculate the IRR of the following cash flows: -$550,000 in year 0; $430,000 in year 1; $100,000 in year 2; and $200,000 in year 3. Is the project acceptable if the cost of capital is 10%?

b) Now calculate the MIRR of the same cash flows assuming a reinvestment rate of 12%. Is the project acceptable or not acceptable under this methodology?

Gerry plans to purchase a $325,000 home with a 30 year mortgage and a 4.25% interest rate. Calculate his monthly payment to the nearest cent.

Ishiguro Transcontinental paid a dividend of $4.15 last year and the company anticipates this will grow at 3.70% for the foreseeable future. The appropriate discount rate (expect return) for the stock is 12.40%, Ishiguro's stock price is closest to:

For the coming year you have determined that the following possibilities are most likely for stock A:

What is the expected return for stock A?

How much is the price of a perpetuity paying $1000 per year, if the discount rate is 8.0% and its first payment is in 3 years?

1. An asset pays a cash flow of 100,000 in 1 year and 150,000 in 2 years. The discount rate is 4% for each. You have a 2-year horizon and the reinvestment rate one year from today is (expected to be) 5%. What is your (expected) Rate-of-Return? (Please show all work)

If you expect the yield curve to invert next year, with spot rates for maturities of 10-years and above falling and spot rates for maturities less than 10-years rising. Given your forecast, explain which of bond Bond A or Bond B you would recommend for a long position over the upcoming year: Bond A -discount bond with a duration of 12-years and YTM of 5%; Bond B -coupon rate of 10%, a duration of 12-years, and a YTM of 5%.