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1) Creative Solutions, Inc., has just invested= $4,992,832 on equipment. Firm uses payback period criteria of not accepting any project which takes more than 4 years to recover its costs. Company anticipates cash flows of= $690,846, $761,985, $1,054,869, $1,653,694, $1,972,952, and $2,301,260 over the next 6 years.

i) Determine the payback period of this investment?

ii) Should Creative Solutions, Inc. go ahead with this project?

2) Determine the announcement of new information made within month from today (i.e., earnings announcement, merger, etc.) for any publicly traded stock which moves stock price at least= 1%. Print out or sketch a chart which shows at least 2 days before event and at least one day after.

a) By using this chart, analyze if evidence is consistent with semi-strong form market efficiency.

b) Is stock market reaction consistent with strong form of market efficiency?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M915086

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