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Blinding Light Co. has a project available with the following cash flows: Year Cash Flow 0 −$35,390 1 7,910 2 9,490 3 13,420 4 15,530 5 10,220 What is the project’s IRR?

Power Manufacturing has equipment that it purchased 7 years ago for $2,950,000. The equipment was used for a project that was intended to last for 9 years. However, due to low demand, the project is being shut down. The equipment was depreciated using the straight-line method and can be sold for $480,000 today. The company’s tax rate is 35 percent. What is the aftertax salvage value of the equipment?

Country Breads uses specialized ovens to bake its bread. One oven costs $201,000 and lasts about 10 years before it needs to be replaced. The annual operating cash outflow per oven is $35,000. What is the equivalent annual cost, or EAC, of an oven if the required rate of return is 16 percent?

Challenging Fabio is the finance office at a local, for-profit hospital. He is determining if the firm should purchase a new piece of equipment that they currently rent from a medical device supplier. To do this, he wants to determine the minimum cost savings the equipment needs to create to “pay for itself” (i.e., the cost savings that set the NPV of the equipment equal to zero). The equipment has an initial cost of $[ICx],000 and will be straight-line depreciated to zero over ten years. After 10 years, the market value of the equipment will be 5 percent of the equipment’s initial cost. The equipment will require the firm immediately invest $[dNWCx],000 in new net working capital, which they will be able to fully recover at the end of the project. The equipment will not impact the hospital’s revenues. The hospital requires a return of [Rx] percent on such investments and the hospital has a 21 percent tax rate. What is the annual pre-tax cost savings required for the equipment to have an NPV of exactly zero? (Enter your answer rounded to the nearest $0.01. You savings should be a positive number)

What is the price of a $1,000-bond that has a yield to maturity of 4.5 percent if it matures in 10 years and pays a 10.5 percent, semiannual coupon?

A project with an initial cost of $37,900 is expected to provide cash flows of $10,350, $8,660, $8,770, and $8,870 over the next four years, respectively. If the required return is 12.1 percent, what is the project’s profitability index?

Blinding Light Co. has a project available with the following cash flows: Year Cash Flow 0 −$33,310 1 8,300 2 10,010 3 14,330 4 16,050 5 11,000 What is the project’s IRR?

Power Manufacturing has equipment that it purchased 4 years ago for $2,000,000. The equipment was used for a project that was intended to last for 6 years. However, due to low demand, the project is being shut down. The equipment was depreciated using the straight-line method and can be sold for $290,000 today. The company’s tax rate is 34 percent. What is the aftertax salvage value of the equipment?

A project has a unit price of $29.99, a variable cost per unit of $9.06, fixed costs of $487,020, and depreciation expense of $38,009. Ignore taxes. What is the accounting break-even quantity?

Our firm is investing in its production capacity. The expansion will require a $655,000 investment in new property, plant, and equipment. The expansion will increase sales, which will necessitate an investment of $10,000 and $50,000 in new inventory and accounts receivable, respectively. Expanded sales will require more materials from our suppliers, which will increase our accounts payable by $45,000. What is the investment’s initial cost?