Travis & sons has a capital structure that is based on 40 percent debt, 5 percent preferred stock, and 55 percent common stock. the pretax cost of debt is 7.5 percent, the cost of preferred is 9 percent, and the cost of common stock is 13 percent. the tax rate is 39 percent. the company is considering a project that is equally as risky as the overall firm. this project has initial costs of $325,000 and annual cash flows of $87,000, $279,000 and $116,000 over the next three years, respectively. what is the net present value of this project? (note: you won’t be required to find the npv for the exam, but i want you to do this homework problem to be sure you understand that the wacc is the appropriate discount rate when evaluating projects).

Reliability and validity reliability and validity are two important considerations that must be made with any type of data collection. reliability refers to the ability to consistently produce a given result. in the context of psychological research, this would mean that any instruments or tools used to collect data do so in consistent, reproducible ways. unfortunately, being consistent in measurement does not necessarily mean that you have measured something correctly. to illustrate this concept, consider a kitchen scale that would be used to measure the weight of cereal that you eat in the morning. if the scale is not properly calibrated, it may consistently under- or overestimate the amount of cereal that’s being measured. while the scale is highly reliable in producing consistent results (e.g., the same amount of cereal poured onto the scale produces the same reading each time), those results are incorrect. this is where validity comes into play. validity refers to the extent to which a given instrument or tool accurately measures what it’s supposed to measure. while any valid measure is by necessity reliable, the reverse is not necessarily true. researchers strive to use instruments that are both highly reliable and valid.