You are forecasting the return

You are forecasting the returns for Crane Company, a
plumbing supply company, which pays a current dividend of $10.30.
The dividend is expected to grow at a rate
of 3.3 percent. You have identified two public
companies, Ayayai and Pina, which appear to be
comparable to Crane. Ayayai has the same total risk
as Crane and a beta of 1.35. Pina, in contrast,
has a very different total risk but thThe table below shows the un-discounted cash flows of 5 projects
over 4 years. Use this following information to answer questions 2
through 6. For all questions assume that the yearly discount
rate is 9%.

Project Year 0 Year 1 Year 2 Year 3 Year 4
A -$1,000 $300 $500 $500 $600
B -$1,000 $150 $200 $1,000 $1,200
C -$2,000 $1,900 $200 $0 $0
D -$200 $300 $0 $0 $0
E -$200 $300 $0 -$100 $0

Question 2:

If the projects are mutually exclusive which project do you
accept?

Project A

Project B(correct)

Project C

Project D

Project E

Question 3:

Based on your answer from question 2, what is that project’s
NPV. Enter you number to the nearest whole number without the
$ sign (example: $532.89 enter as 533).

Answer:923(correct)

Question 4:

If the projects were not mutually exclusive and you had
unlimited money, which projects would you accept? Select all
valid projects from the list below.

Project A(correct)

Project B(correct)

Project C

Project D(correct)

Project E

Question 5:

Based on your answer from question 4, select the project that
has the highest IRR, what is that project’s IRR? Enter you
number to four decimal place without the % (example 13.47% enter as
.1347).

Question 6:

If you are interested in selecting the project with the highest
Profitability Index which project would you select.

Project A

Project B

Project C

Project D

Project E

*Questions for 5&6 rest of the answers are
correct
e same market risk
as Crane. Pina’s beta is 1.15. The market risk
premium is 4.65 percent and the risk-free rate
is 1.15 percent.

Determine the price of Crane. (Round
answer to 2 decimal places, e.g. 125.61.)

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