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Which one of the following best illustrates erosion costs in capital budgeting analysis as they relate to a hot dog stand located on the beach?

Which of the following usually does NOT typically appear in a stock quote in the financial press?

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 6%, this bond should:

You discover the engine-oil additive your scientists developed three years ago makes a great men’s after-shave once diluted properly using certain chemicals. How should you treat the original $125,000 of research & development (R&D) expenditures from three years ago that went into developing the engine-oil additive for your present decision regarding whether or not to begin production of the after-shave?

A project costs $75,000, will be depreciated straight-line to zero over its 3 year life, and will require a net working capital investment of $6,000 up-front. The project generates an annual operating cash flow (OCF) of $30,000. The fixed assets will be sold for $7,000 at the end of the project. If the firm has a tax rate of 35% and a required return of 8%, what is the project’s NPV?

A situation in which taking one investment prevents the taking of another is called:

Investors can value a bond or stock by discounting its future cash flows at the rate of return required by the investor for taking on the risk of owning the bond or stock.

A project costs $75,000 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 10%, what is the NPV?

What is the profitability index of the following investment if the required return = 6%?             Year       0         1          2          3                    CF       -150     +$50    +$70    +$70

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?