An investment project will require development costs of $120 million at time zero and $80 million at the end of second year from time zero with incomes of $25million per year at the end of years 1, 2 and 3 and incomes of $60 million per year at the end of years 4through 10 with zero salvage value predicted at the end of year 10. Calculate the rate of return for this project.

3) Jake's Farm Park issued a 20 year, 5.8% quarterly bond 5 years ago. The bond currently sells for 95% of its face value. The company's tax rate is 21%. What is the pre-tax and after-tax cost of debt? (10 points)

a. Explain how the investor can use the above option(s) to construct a protective put strategy. b. If the stock price stays at $80 on the option maturity date, what would happen? In this case, what is the total portfolio value (or payoff) of the investor? What is the total profit/loss of the protective strategy? c. If the stock price goes down to $75 on the option maturity date, what would happen?In this case, what is the total portfolio value (or payoff) of the investor? What is the total profit/loss of the protective strategy?

Considering discount rate of 8%, calculate NPV,Benefit Cost Ratio, and Present Value Ratio for the following investment and explain if it is a good investment. C: Cost, I:Income, L: Salvage value \text { ó, calculate NPV, } Value Ratio for the n if it is a good

2) Courtney's car parts company common stock has a beta of 1.2. If the risk free rate's 3.3% and the expected return in the market is 12%. What is the company's cost of equity? (10 points)

Consider a non-dividend paying stock with current price $300.11. The1-year spot rate is 2.5% and a futures contract on the stock with maturity 1 year is trading at $313.77. Suppose you borrow so that you can buy 680 shares of the stock. Moreover, you sell 680 futures contracts. The payoff of your position at maturity is