The Norris Co

question 7

Multiple Choice

The Norris Co. has an improved version of its hotel stand. The investment cost is expected to be $72 million and will return $13.5 million for 5 years in net cash flows. The ratio of debt to equity is 1 to 1. The cost of equity is 13%,the cost of debt is 9%,and the tax rate is 34%. The appropriate discount rate,assuming average risk,is:

• A) 8.65%
• B) 9%
• C) 9.47%
• D) 10.5%
• E) 13%

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Goods or services produced in one country and sold to customers in other countries, contributing to a nation's economy.

Imports

Goods or services brought into one country from another for the purpose of trade or sale.

Business Cycle

The cyclical fluctuations in economic activity and growth that an economy experiences over time, typically consisting of expansion, peak, contraction, and trough phases.

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