I need these answers in a 3 hours! Attached are the questions that I need answered! Thank you!
1. Recall that the net present value (NPV) and internal rate of return (IRR) techniques take the time value of money into consideration. Compare and contrast these two techniques, focusing on IRR when the NPV is positive, zero, and negative. Be sure to include a discussion of the NPV discount rate in your response.
2. Recall that the security market line (SML) illustrates the relationship between systematic risk and expected returns. Perhaps the most famous and practical application of the SML is the capital asset pricing model (CAPM), as follows: E(Ri)= Rf + [E(Rm) – Rf] X Bi
a. Define each of the variable or terms in this equation
b. Calculate the E(Ri), assuming that E(Rm) equals 12%, Rf equals 6%, and Bi equals 1.2.
3. Describe the differences between an ordinary annuity, an annuity due, and a perpetuity.
4.
Assume that a project has a negative net present value (NPV) of $500 and an internal rate of return (IRR) of 10%. Is the discount rate used to calculate the NPV higher than, lower than, or equal to 10%? Compare and contrast these two techniques, using this example, and focusing on IRR when the NPV is positive, zero, and negative.
5. Explain the concept of venture capital. Include a definition of the term venture capital, describe who will need to obtain venture capital financing, and explain the type of return that’s required from a venture capital firm.
6. The weighted average cost of capital (WACC) can be related to the basic accounting equation as follows: A= L + OE
Compare and contrast the WACC to this basic accounting equation. Does the WACC contain a profit component? How does the WACC relate to the discount rate used in net present value (NPV) computation, using a case where NPV equals zero to make your point?