1. A new IT server for a company will cost $407,432.00 today. The company expects the server will create an incremental cash flow to the firm of $134,435.00 per year. The company wants an 8.00% return for all capital budgeting projects. The company will run the server for the next 5 years. What is the IRR of this project?
2. Fifteen, Inc.'s common stock has a beta of 0.9. The risk-free rate is 5.4 percent and the expected return on the market is 8.7 percent. What is the company’s cost of equity capital?