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Managers at Massive Dynamics are evaluating a new industrial product. The product will sell at $[p] per unit for the next three years. The fixed cost and depreciation will be $[FCx],000 and $[Depx],000 per year, respectively, and variable costs will be $[VC] per unit. The production will not affect the firm’s net working capital, but will require an initial investment of $[ICx],000 in fixed assets. The fixed assets will have an after-tax salvage value of $[ATSx],000 after three years. The managers, though, are not confident about their forecast of the quantity they will sell per year. They expect to sell [qx],000 units per year, but this forecast is only accurate within ±25 percent. If Massive Dynamics’ tax rate is 21 percent and they require a return of [Rx] percent for new industrial products, what is the worst-case NPV? (Enter your answer rounded to the nearest $0.01)  

A company purchased an asset for $3,750,000 that will be used in a 3-year project. The asset is in the 3-year MACRS class. The depreciation percentage each year is 33.33 percent, 44.45 percent, and 14.81 percent, respectively. What is the book value of the equipment at the end of the project?

Blink of an Eye Company is evaluating a 5-year project that will provide cash flows of $38,900, $78,390, $63,090, $61,140, and $44,340, respectively. The project has an initial cost of $179,840 and the required return is 8.9 percent. What is the project’s NPV?

A classroom of students was asked to state the number of pets they have at home. Use the following data to determine the mode.  0, 2, 5, 3, 3, 1, 0, 1, 7, 2, 2, 3, 12, 2, 4, 2, 5, 10

A project with an initial cost of $30,400 is expected to provide cash flows of $10,500, $11,500, $14,600, and $9,100 over the next four years, respectively. If the required return is 8.9 percent, what is the project’s profitability index?

Alt’s is contemplating the purchase of a new $271,000 computer-based order entry system. The system will be depreciated straight-line to zero over the system’s five-year life. The system will be worthless at the end of five years. The company will save $108,400 before taxes per year in order processing costs and will reduce its net working capital by $10,000 immediately. The net working capital will return to its original level when the project ends. The tax rate is 21 percent. What is the internal rate of return for this project?

Stocks and bonds are financial securities that represent ownership of and loans to a corporation, respectively.

Mountain Frost is considering a new project with an initial cost of $247,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $24,300,$21,300, $27,400, and $18,700, respectively. What is the average accounting return?

Some people say that technology can change culture. Neil Postman worries that television:

A project that costs $22,500 today will generate cash flows of $4,700 per year for seven years. What is the project’s payback period?