Table 3.4 Hennesaw Lumber, Inc. estimates that its sales in…

Table 3.4 Hennesaw Lumber, Inc. estimates that its sales in 2018 will be $4,500,000. Interest expense is to remain unchanged at $105,000 and the firm plans to pay cash dividends of $150,000 during 2018. Hennesaw Lumber, Inc.’s income statement for the year ended December 31, 2017 is shown below.  Income Statement Hennesaw Lumber, Inc. For the Year Ended December 31, 2017 Sales Revenue                         $4,200,000 Less: Cost of goods sold            3,570,000 Gross Profits                               $630,000 Less: Operating Expenses             210,000 Operating profits                          $420,000  Less: Interest expense                   105,000  Net profits before taxes               $315,000  Less: Taxes (40%)                        126,000  Net profits after taxes                 $189,000  Less: Cash dividends                    120,000  To: Retained earnings                   $69,000 The pro forma net profits after taxes for 2018 are (See Table 3.4) 

A firm with unlimited funds must evaluate five projects. Pro…

A firm with unlimited funds must evaluate five projects. Projects 1 and 2 are independent and Projects 3, 4, and 5 are mutually exclusive. The projects are listed with their returns. Project    Status                          Return(%) 1              Independent                    14 2              Independent                    12 3              Mutually exclusive         10 4              Mutually exclusive         15 5              Mutually exclusive         12 A ranking of the projects on the basis of their returns from the best to the worst according to their acceptability to the firm would be