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1.Which of the following statements is FALSE? Free cash flow is cash generated by the firm before payments to debt and equity holders. In the discounted free cash flow model, we estimate a firm's current enterprise value by computing the present value of the firm's free cash flow. Because the cash flows from stock are known with certainty, we can discount them using the risk-free interest rate. By repurchasing shares, the firm decreases its share count, which increases its earning and dividends on a per-share basis. O The total payout model discounts the total payouts that the firm makes to shareholders, which is the total amount spent on both dividends and share repurchases.

2. Bunnings Ltd is considering to invest in one of the two following projects to buy a new equipment. Each equipment will last 5 years and have no salvage value at the end. The company's required rate of return for all investment projects is 8%. The cash flows of the projects are provided below. Equipment 1 $186,000 Equipment 2 $195,000 Cost Future Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 86 000 93 000 83 000 75 000 55 000 97 000 84 000 86 000 75 000 63 000 Required: a) Identify which option of equipment should the company accept based on Profitability Index? b) Identify which option of equipment should the company accept based on discounted pay back method if the payback criteria is maximum 2 years?need solution for both the part a and b.
by using formula for part A is
PI= total of PV of expected CFs/initial cash outlay.
and for part B use discounted payback method.
please do not use excel sheet need clear cut answer each and every mathematical working.

3.Which of the following statements is FALSE? The volatility of the portfolio will differ, depending on the correlation between the securities in the portfolio. The variance is a measure of how "spread out" the distribution of the return is. The covariance and correlation allow us to measure the co-movement of returns. If the return is riskless and never deviates from its mean, its variance is equal to zero. We say a portfolio is an efficient portfolio whenever it is possible to find another portfolio that is better in terms of both expected return and volatility.