What is the undiscounted cash flow in the final year of an investment, assuming $100,000 after-tax cash flows from operations, $10,000 from the sale of a fully depreciated machine, $4,000 required in additional working capital, and a 35% tax rate?
A. $104,000 B. $6,500 C. $100,000 D. $110,500
2. If a stock is purchase for $30 per share and held one year, during which a $3.00 divined is paid and the price climbs to $36, the nominal rate of return is?
A. 10% B. 20% C. 30% D. 25%
3. What is the percentage return on a stock that was purchased for $74.00, paid a $6.00 divined after one year, and was then sold for $70.00?
A. -5.4% B. +2.7% C. +4% D.+8.1% The company cost of capital: A. cost of funds used for financing a business B. Depends on current profits and cash flows C. Is measured using security book values D. depends on historical profits and cash flows.