1, A currently used machine costs $7,000 annually to run. What is the maximum that should be paid to replace the machine with one that will last 4 years and will cost only $3,000 annually to run? The opportunity cost of capital is 14 %. The maximum amount that should be paid is: $ (please round your final result to 2 decimals, but keep as many decimals as possible during calculation)

2,

Consider the following two tractors a company can purchase. The following tables provide the costs the company will incur (in thousands of dollars) in the lifetime of each tractor.

	Initial Cost	Operating Costs per Year	Expected Life
Diesel	$16,000	$6,000	6
Gasoline	$7,000	$14,000	4

The transportation firm can only afford one of the tractors. The two tractors have identical production capabilities. The firm's cost of capital is 2%.

Find the present value of the costs of using the two tractors.

Diesel =

Gasoline =

3,

Growth Enterprises believes its latest project, which will cost $30,000 to install, will generate a perpetual growing stream of cash flows. The cash flow at the end of the first year will be $4,500, and cash flows in future years are expected to grow indefinitely at an annual rate of 1%.

If the discount rate for the project is 7%, what is the project NPV?

NPV=

(please round your final result to 2 decimals if necessary)

What is the internal rate of return (IRR) for the project?

IRR = %

(Note: the above answer is in terms of percentage. Please round your final result to 2 decimals if necessary)