A consultant predicts that there is a 25 percent chance of earning $500,000 and a 75 percent chance of earning $100,000. The expected profit is $200,000. The standard deviation is O $120,000. $160,000. $165,699. O $173,205.

Consider an investment that pays off $700 or $1,400 per $1,000 invested with equal probability. Suppose you have $1,000 but are willing to borrow to increase your expected return. What would happen to the expected value and standard deviation of the investment if you borrowed an additional $1,000 and invested a total of $2,000? What if you borrowed $2,000 to invest a total of $3,000? Instructions: Complete the table below to answer the questions above. Enter your responses as whole numbers and enter percentage values as percentages not decimals (i.e., 23% not 0.23). Enter a negative sign (-) to indicate a negative number if necessary. Invest $1,000 Invest $2,000 Invest $3,000 Expected Value $ 1050 1200 $ $ 1300 Percentage 20 % 30 % 40 % Standard Deviation 300 600 900 Expected Return N/A Doubled Tripled

Coore Manufacturing has the following two possible projects. The required return is 12 percent. Year Project Y Project Z 0 -$27,500 -$55,000 1 13,500 19,500 234 2 11,900 26,000 3 14,300 17,500 9,900 24,000 a. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Which, if either, of the projects should the company accept? a. Project Y Project Z 1.38 ง b. Project Y 3 decimal places required. Project Z c. Accept project x

Suppose you have a project that will cost $800,000 last for ten years. The cash flows for each year have an expected value of $175,000 with a standard deviation of $20,000. The cost of capital is 10%. Use a Monte Carlo simulation with 1,000 replications to evaluate this project using the NPV and IRR approaches. USE EXCEL AND EXPLAIN EACH STEP

Kirklin Clinic is evaluating a project that costs $60,000 and has expected net cash inflows of $7,500 per year for eight years. The first inflow occurs one year after the cost outflow, and the project has a cost of capital of 12%. What is the project's MIRR? (hint: remember to put the answer as a percentage). O 13.9% 5.5% O 3.2% 22.1% h

You are asked to evaluate a new tractor project for Deere. The engineers and marketing and accounting folks have pooled their efforts to generate the following expectations about the project's cash flows (FCFF): CF 0 = - 109.4, CF1 = 20, CF2 =,55, CF3 = 60, CF4 = 60, CF4 = 25, CF5 = 10. If the WACC is 10%, what will be the profitability index for this project? (write this number as a decimal and not as a percentage, e.g. 0.11 not 11 %. Round your answer to three decimal places. For example 1.23450 or 1.23463 will be rounded to 1.235 while 1.23448 will be rounded to 1.234)