1 .

A 5-yr project has an initial requirement of $147,019 for new equipment and $9,851 for net working capital. The fixed assets will be depreciated to a zero book value over 5 years and have an estimated salvage value of $22,221. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $66,029. The cost of capital is 11% and the tax rate is 34%. What is the net present value of the project?

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

2.

XYZ is considering a 3-yr project. The initial outlay is $120,000, annual cash flow is $50,000 and the terminal cash flow is $10,000. The required rate of return (cost of capital) is 15%. The net present value is $736.42. What if the annual cash flow increases to $59,000 instead? Re-calculate the NPV.

3.

XYZ is considering the purchase of a new equipment. The equipment costs $46,604 and an additional $1,207 is needed to install it. The project will also require an initial $5,185 investment in net working capital. The equipment will be depreciated straight-line to zero over a five-year life. What is the project's initial investment outlay? (Even though initial outlay is a negative cash flow, enter the absolute value.)

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.