1. Required rate of return Stock R has a beta of 1.9, Stock S has a beta of 0.8, the required return on an average stock is 8%, and the risk-free rate of return is 3%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places.

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2. Calculate the NPV of the following cash flow projections based on required rate of 10.5%. Year 0=120,000, year 1= 35,000, year2=47,500, year 3=55,000, year 4= 62,000. Is this a good business project to accept? why or why not.