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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?

Power Manufacturing has equipment that it purchased 7 years ago for $2,150,000. 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 $320,000 today. The company’s tax rate is 34 percent. What is the aftertax salvage value of the equipment?

Bruno’s Lunch Counter is expanding and expects operating cash flows of $30,900 a year for 4 years as a result. This expansion requires $77,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $6,200 of net working capital throughout the life of the project, which will be fully recovered at the end. What is the net present value of this expansion project at a required rate of return of 11 percent?

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A project with an initial cost of $30,200 is expected to provide cash flows of $10,930, $9,030, $8,870, and $9,280 over the next four years, respectively. If the required return is 9.3 percent, what is the project’s profitability index?

Power Manufacturing has equipment that it purchased 6 years ago for $2,100,000. The equipment was used for a project that was intended to last for 8 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 $310,000 today. The company’s tax rate is 40 percent. What is the aftertax salvage value of the equipment?