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6. 7. You are considering a summer job which will generate $100 per month in income for 5 months. It will cost you $50 to get properly certified for this job and you will buy a gas card today for $200 that will cover your mileage all summer. What is the IRR of taking the job? a. 41.0% b. 199.2% c. 28.7% d. -14.2% Project P has an initial cost of $50,000 and creates inflows of $10,000 in Year 1, $21,000 in Year 2, $17,000 in Year 3, $20,000 in Year 4, and $40,000 in Year 5. What is the payback period? a. b. 4 years 3.4 years 3.1 years C. d. Not enough information to decide 8. Which of the following is considered the most accurate method of estimating a company's cost of equity? a. DDM b. CAPM c. IRR d. NPV 9. Starbucks was on track to do record sales in 2022 until a celebrity endorsement on a new, start-up coffee chain halts Starbucks sales. This is an example of a. Managed risk b. Total risk c. Ongoing risk d. Event risk 10. In the bond market, you note that most bonds are currently paying 3.5% coupon payments. You also see a "zero-coupon" bond available for purchase. How would you expect this to be priced compared to the standard $1,000 face value of coupon paying bonds? a. At a slight premium b. At a steep premium c. At a slight discount d. At a steep discount

6. 7. You are considering a summer job which will generate $100 per month in income for 5 months. It will cost you $50 to get properly certified for this job and you will buy a gas card today for $200 that will cover your mileage all summer. What is the IRR of taking the job? a. 41.0% b. 199.2% c. 28.7% d. -14.2% Project P has an initial cost of $50,000 and creates inflows of $10,000 in Year 1, $21,000 in Year 2, $17,000 in Year 3, $20,000 in Year 4, and $40,000 in Year 5. What is the payback period? a. b. 4 years 3.4 years 3.1 years C. d. Not enough information to decide 8. Which of the following is considered the most accurate method of estimating a company's cost of equity? a. DDM b. CAPM c. IRR d. NPV 9. Starbucks was on track to do record sales in 2022 until a celebrity endorsement on a new, start-up coffee chain halts Starbucks sales. This is an example of a. Managed risk b. Total risk c. Ongoing risk d. Event risk 10. In the bond market, you note that most bonds are currently paying 3.5% coupon payments. You also see a "zero-coupon" bond available for purchase. How would you expect this to be priced compared to the standard $1,000 face value of coupon paying bonds? a. At a slight premium b. At a steep premium c. At a slight discount d. At a steep discount

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 8EB: Shonda & Shonda is a company that does land surveys and engineering consulting. They have an...
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6. 7. You are considering a summer job which will generate $100 per month in income for 5 months. It will cost you $50 to get properly certified for this job and you will buy a gas card today for $200 that will cover your mileage all summer. What is the IRR of taking the job? a. 41.0% b. 199.2% c. 28.7% d. -14.2% Project P has an initial cost of $50,000 and creates inflows of $10,000 in Year 1, $21,000 in Year 2, $17,000 in Year 3, $20,000 in Year 4, and $40,000 in Year 5. What is the payback period? a. b. 4 years 3.4 years 3.1 years C. d. Not enough information to decide 8. Which of the following is considered the most accurate method of estimating a company's cost of equity? a. DDM b. CAPM c. IRR d. NPV 9. Starbucks was on track to do record sales in 2022 until a celebrity endorsement on a new, start-up coffee chain halts Starbucks sales. This is an example of a. Managed risk b. Total risk c. Ongoing risk d. Event risk 10. In the bond market, you note that most bonds are currently paying 3.5% coupon payments. You also see a "zero-coupon" bond available for purchase. How would you expect this to be priced compared to the standard $1,000 face value of coupon paying bonds? a. At a slight premium b. At a steep premium c. At a slight discount d. At a steep discount
Transcribed Image Text:6. 7. You are considering a summer job which will generate $100 per month in income for 5 months. It will cost you $50 to get properly certified for this job and you will buy a gas card today for $200 that will cover your mileage all summer. What is the IRR of taking the job? a. 41.0% b. 199.2% c. 28.7% d. -14.2% Project P has an initial cost of $50,000 and creates inflows of $10,000 in Year 1, $21,000 in Year 2, $17,000 in Year 3, $20,000 in Year 4, and $40,000 in Year 5. What is the payback period? a. b. 4 years 3.4 years 3.1 years C. d. Not enough information to decide 8. Which of the following is considered the most accurate method of estimating a company's cost of equity? a. DDM b. CAPM c. IRR d. NPV 9. Starbucks was on track to do record sales in 2022 until a celebrity endorsement on a new, start-up coffee chain halts Starbucks sales. This is an example of a. Managed risk b. Total risk c. Ongoing risk d. Event risk 10. In the bond market, you note that most bonds are currently paying 3.5% coupon payments. You also see a "zero-coupon" bond available for purchase. How would you expect this to be priced compared to the standard $1,000 face value of coupon paying bonds? a. At a slight premium b. At a steep premium c. At a slight discount d. At a steep discount
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