Sam Corp. is considering purchase of new equipment whose data are shown below. This equipment should be used with tool X the firm now owns, and if this equipment is not purchased, the tool X would be sold for $15,000. What is the project’s Year 0 cash flow? Equipment cost $60,000 Increase in NOWC $15,000 Tax rate 35%

Stock a has a beta of 1.2 and a standard deviation of 20%. stock b has a beta of 0.8 and a standard deviation of 25%. portfolio p has $200,000 consisting of $100,000 invested in stock a and $100,000 in stock b. which of the following statements is correct? (assume that the stocks are in equilibrium.) (a) stock b has a higher required rate of return than stock a. (b) portfolio p has a standard deviation of 22.5%. (c) portfolio p has a beta equal to 1.0. (d) more information is needed to determine the portfolio's beta. (e) stock a's returns are less highly correlated with the returns on most other stocks than are b's returns.