Answer:
      a. 5 years 
      b. Yes they will because the payback period is 5 years. 
Explanation:
a. Payback period
First calculate the annual cash inflow:
= Net income + Depreciation 
= 66,500 + 28,500
= $95,000
The investment cost was $475,000
Payback period = Investment cost / Annual cash inflow
= 475,000 / 95,000
= 5 years 
b. The company will purchase the games because they have a payback period of 5 years. 
 
        
             
        
        
        
Answer:
4.53% 
Explanation:
Data provided in the question:
Expected return = ∑ (Return × probability)
Thus,
Expected return = (0.06 × 22) + (0.92 × 13) + (0.02 × (-15))
= 12.98%
Now,
Probability       Return        Probability × (Return-Expected Return)²
0.06                  22                   0.06 × (22% - 12.98%)² = 4.8816
0.92                  13                    0.92 × (13% - 12.98%)² = 0.000368
0.02                  -15                   0.02 × (-15% - 12.98%)² = 5.657608
========================================================
                                                                             Total = 20.5396%
Standard deviation = 
= √(20.5396)
= 4.53% 
 
        
             
        
        
        
Answer:
Digital Fruit
The expected market price of the common stock after the announcement is:
$20 per share.
Explanation:
Outstanding number of shares = 40 million
Market price of outstanding shares = $20 a share
Total market capitalization = $800 million
Debts introduced = $310 million
Market capitalization after the debt issue = $490 million ($800 - 310 million)
Number of shares bought back = $310 million /$20 = 15,500,000
Outstanding number of shares after the buy-back = 40 million minus 15.5 million 
= 24,500,000 shares
Expected market price of the common stock after the announcement
= $490,000,000/24,500,000 
= $20 per share