Question
1. A project costs $5,000 and is expected to last 2 years, producing cash income of $4,000 in Year 1 and $6,000 in Year If
1. A project costs $5,000 and is expected to last 2 years, producing cash income of $4,000 in Year 1 and $6,000 in Year If the required rate of return in 8%, what is the net present value of the project (NPV)?
a.-$2,418.92
b.$1,756.43
c.$3,847.74
d.$4,897.62
2.A project has the following cash flows:
Cash flow with project = $2,500,0000
Cash flow without project = $2,000,000
What is the Incremental cash flow?
a.-$500,000
b.$500,000
c.$2,000,000
d.$4,500,000
3.If the nominal interest rate is 10% and the inflation rate is 6$, what is the real interest rate? a.1.84% b. 2.89% c.3.77% d.4.56%.
4.Use the following data to calculate the operating cash flow of the company.
Revenue: $10,000,000
Expenses: $7,000,000
Taxes: $1,200,000
a.$1,800,000 b. $2,000,000 c.$2,800,000 D. $3,000,000
5.Total cash flow includes:
a.cash flows from capital investments b. operating cash flows c. cash flows from changes in working capital D. all of the above
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