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Shawn’s construction company has asked you to calculate operating cash flow for 2019.  The company had total revenue of $4,116 with selling and administrative expenses of $554.  The cost of goods sold for 2019 was $2,354.  Shawn’s used depreciation expense of $319 and interest expense of $162.  The company paid out $75 in dividends after paying taxes of $186. 

Under many circumstances, conglomerates display negative added value which implies that the conglomerate is pursuing a corporate strategy that destroys value.  When considering why this negative added value exists, the most prominent and likely rationale includes:

You have been asked to analyze a project by calculating the NPV of the project.  This project is expected to produce cash flows of $41,000, $39,000, and $17,000 over the next three years, respectively. After three years, the project will be worthless. What is the net present value of this project if the applicable discount rate is 12.25 percent and the initial cost is $78,500?  (pick the closest answer)

 There are a several techniques used to analyze projects within a firm.  Among the most popular, are NPV, IRR, and Payback.  NPV has increased in popularity over the years.  To determine the net present value of a project, you calculate: 

Sandy’s Sunshine, Inc. is considering a new project.  The project has an initial cash outflow of $13,000 and cash inflows of $2,000 in Year 1, $6,900 in Year 2, and $2,400 in Year 3? The discount rate is 9.5 percent.  What is the NPV of this proposed project?  (select the closest answer)

In our text, there was much discussion about the appropriate discount rate to use when analyzing a project.  The discount rate that makes the net present value of an investment exactly equal to zero is called the:

The Wacky Widget Wizard, Inc. (WWW) uses payback as an initial screening on projects.  A new widget costs $4,500 and is expected to return $1,750 a year for three years and then be worthless. What is the payback period for this new widget?  

A conflict of interest between the stockholders and managers of a firm is referred to as the:

Asymmetric information may result in the following types of information distortions:

Stock options granted to a corporation’s managers are primarily designed to: