1. A profitable high-tech company would generally have: a. high price-to-book ratio and high price-to-earnings ratio. b. high price-to-book ratio and low price-to-earnings ratio. c. low price-to-book ratio and high price-to-earnings ratio. d. low price-to-book ratio and low price-to-earnings ratio.
2. You are considering a project that promises you cash flows of 920 USD at the end of year 1, and 742 usd at the end of year 2. The cost to buy into the project is 1,028. What is the internal rate of return (IRR) on this project? Enter answer in percents, accurate to 2 decimal places.
3. Recall that the Solow growth model specifies the economic production function as
Y = A * K^a * L^(1-a)
Consider the following initial conditions:
A = 1
a = 0.32
K = 14
L = 82
What is the output of the economy (Y) in the first period?