Suppose that in coming year, you expect exxon-mobil stick have a volatility of 42% and a beta of 0.9, and merck stock to have a volatility of 24% and a beta of 1.1. the risk free interest rate is 4% and the market’s expected return is 12%. the cost if capital for a project with the same beat as exxon mobil stock is closest to:
a.11.6%
b.11.2%
c. 12.8%
d. 7.6%

Six years ago, an 80-kw diesel electric set cost $160,000. the cost index for this class of equipment six years ago was 187 and is now 194. the cost-capacity factor is 0.6. the plant engineering staff is considering a 120-kw unit of the same general design to power a small isolated plant. assume we want to add a precompressor, which (when isolated and estimated separately) currently costs $13291. determine the total cost of the 120-kw unit. (hint: skip $ and comma symbols)