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Cirice Corporation is considering opening a branch in another state. The operating cash flow will be $132,900 a year. The project will require new equipment costing $556,000 that would be depreciated on a straight-line basis to zero over the 6-year life of the project. The equipment will have a market value of$153,000 at the end of the project. The project requires an initial investment of $35,000 in net working capital, which will be recovered at the end of the project. The tax rate is 21 percent. What is the project’s IRR?

Which one of the following will increase a bid price?

Webster Iron Works started a new project last year. As it turns out, the project has been operating at its accounting break-even level of output and is now expected to continue at that level over its lifetime. Given this information, you know that the project:

You are compiling a spreadsheet with column headings of: Invoice number; Customer number; < 30 days; 31-60 days; 61-90 days; > 90 days. You will list every unpaid invoice with the amount owed entered into the appropriate column based on the number of days between the sale date and today. Once you have completed that, you will sort the report by customer number and total the amounts listed in each column. What is this report called?

POD has a project with the following cash flows: Year Cash Flows 0 −$ 251,000 1 147,000 2 164,500 3 129,600 The required return is 8.3 percent. What is the profitability index for this project?

A company has a current ratio of 1.2. Which one of the following actions will increase the company’s net working capital?

Which of the following yields on a stock can be negative?

The accounts receivable approach to credit policy supports the theory that:

A 4-year project has an annual operating cash flow of $47,500. At the beginning of the project, $3,850 in net working capital was required, which will be recovered at the end of the project. The firm also spent $21,600 on equipment to start the project. This equipment will have a book value of $4,340 at the end of the project, but can be sold for $5,430. The tax rate is 21 percent. What is the Year 4 cash flow?

A project is expected to provide cash flows of $12,450, $12,800, $15,900, and $10,400 over the next four years, respectively. At a required return of 8.7 percent, the project has a profitability index of .876. For this to be true, what is the project’s cost at Time 0?