Is Part A as simple as accepting the individual projects with an expected return greater than 15%?

For Part B, would you use the Expected Stock Return formula and accept projects greater than 15%? For example, project #1, r = 8 + 0.5(7) = 11.5%, so do not accept this project? For project #2, 8+0.8(7) = 13.6, don't accept?

I thought the market risk premium was = r_m - r_f , which is the return on the market - risk free rate. The information given doesn't say what the return on the market is, so I assumed we had to just use the market risk premium. This is why I used just the 7%. Let me know what numbers you are using for that part of your formula.

On 8.2, I used the discount factors to find the present value of the firm's debt.

7 payment of 480,000, with an additional 6,000,000 at the end of the 7 years. I used the 10% to compute the present value.

480/1.10 + 480/1.10² + 480/1.10³ + 480/1.10⁴ + 480/1.10⁵ + 480/1.10⁶ + 6480/1.10⁷

I am not for sure if this is correct, but that is how I interpreted the instructions.

[NEAS: Correct.  We use the coupon rate to get the dollars of debt payment.  We use the yield to maturity to dsicount the future cash flows to get the market value.]