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For 39 you have to do a table including all the data to calculate the dividends and then the share price (this exercise is in many past years exams so you should find a correction easily) and for the 42 you just apply the formulas from the formula sheet.
20: "The IRR cannot be used to choose between mutually exclusive projects when the
latter have the same scale, risk or timing of cash flows." <- according to the answer key, this answer does belong to the pitfalls, even though in the book it mentions when they DIFFER in scale, risk or timing, not when they have the SAME scale, risk or timing. It's on page 255 for the people interested. The question asked which did not belong to the pitfalls, so this one has 2 possible answers.
Also, I guess you could argue that for question 30 all 4 options are possible, depending on how you reason.
A change in the expected inflation will affect both the demand and the supply curve.
It will affect the demand curve because when the expected inflation rises, investors will demand a higher interest rate to cover their lost. Thus, demand for bonds fall, same for bond's price and the interest rate will increase. --> Leads to a left shift of the deand curve. And vis versa, if the expected inflation fall, then demand for bonds will rise, price will also rise and the interest rate will decrease. --> Right shift in the demand curve
For supply now, an increqse in the expected inflation will cause the bond price to fall and the interest rate to increase. --> Right shift in the supply curve. And vis versa
Hope, it is a little bit clearer now :)
I get the same value but according to my understanding of the question, isn't it the future value we want both our project to be ?
So don't we have to discount this value (according to strategy 2 --> 14807/(1.1^5) in order to get the value we want to put in the saving account?