# Questions

Ch 9-1    The expected cash flows for a project are as follows. The required return is 12 percent.

Calculate the Internal Rate of Return and state whether the project should be accepted or rejected.

Don't use plagiarized sources. Get Your Custom Essay on
Questions
Just from \$13/Page

year

cash flow

0

(32,000)

1

14,000

2

15,750

3

11,250

The expected cash flows for a project are shown below.

Ch 9-2 a     Calculate the NPV with a 14% required rate of return and state whether the project should be accepted or rejected.

Ch 9-2 b     Calculate the NPV with a 20% required rate of return and state whether the project should be accepted or rejected.

year

cash flow

0

(38,500)

1

16,750

2

20,250

3

17,500

Ch 10-1  Calculating Projected Net Income [LO1] A proposed new investment has projected sales of \$740,000. Variable costs are 46 percent of sales, and fixed costs are \$225,000; depreciation is \$78,000.

Ch 10-1 Prepare a proforma income statement assuming a tax rate of 32 percent. What is the projected net income?

Project Evaluation [LO1] A company is looking at a new production system with an installed cost of \$725,000. This cost will be depreciated in equal installments over the project’s five-year life, at the end of which the system will retain a salvage value of \$125,000. The system will save the firm \$275,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of \$38,000.

Ch 10-2                 If the tax rate is 36 percent and the discount rate is 12 percent, what is the NPV of this project?

Calculating Break-Even [LO3] In each of the following cases:

Calculate the accounting break-even and the cash break-even points. Ignore any tax effects in calculating the cash break-even.

Ch 11-1a               Ch 11-2 a     Ch 11-3 a

unit price

variable cost per unit

fixed cost

annual depreciation

2,200

1,850

6,000,000

2,200,000

50

42

150,000

145,000

275

210

16,250

18,750

Using Break-Even Analysis [LO3] Consider a project with the following data: accounting break-even quantity = 15,400 units; cash break-even quantity = 12,200 units; project life = 6 years; fixed costs = \$220,000; variable costs = \$34 per unit; required return = 10 percent. Ignore the effect of taxes.

Ch 11-2                 Find the financial break-even quantity.

Order your essay today and save 20% with the discount code: GREEN

## Order a unique copy of this paper

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26