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A project costs $100,000, will be depreciated straight-line to zero over its 4 year life, and will require a net working capital investment of $5,000 up-front. The firm has a tax rate of 35% and a required return of 15%. The project generates an annual operating cash flow (OCF) of $45,000. What is the project’s NPV?

Which one of the following bonds has the LEAST amount of interest rate risk?

A firm has 2,000,000 shares outstanding. If 4 directors will be elected, how many shares do you need to control to assure yourself a seat on the board under cumulative voting procedures?

A project costs $80,000 and will be depreciated straight-line to zero over its 4 year life. The project generates annual OCF of $22,000 and the fixed assets will be sold for $9,000 at the termination of the project. If the firm has a tax rate of 35% and a required return of 5%, what is the NPV?

In a financial market someone who brings together buyers and sellers of equity securities but who does not maintain an inventory is called a(n):

Given the following information and assuming straight-line depreciation to zero, what is the profitability index for this project? Initial investment = $75,000; life = 5 years; operating cash flow = $21,000 per year; salvage value = $10,000 in year 5; tax rate = 35%; discount rate = 10%.

Terry’s T-shirts makes hand-painted T-shirts for distribution to upscale retail outlets. The firm is currently considering making hand-painted shorts as well. Which one of the following is the best example of an amount that would be included in the “incremental operating cash flow” related to the hand-painted shorts project?

In capital budgeting analysis, the “bid price” can be defined as:

Suppose that you have just purchased a share of stock for $50. The most recent dividend was $2 and dividends are expected to grow at a rate of 3% indefinitely. What must your required return be on the stock?

Your broker offers you the opportunity to purchase a bond with a coupon rate of 7% per year and a face value of $1,000. If the yield to maturity on similar bonds is 7%, this bond should: