1.) ABC Company is planning a new project that is expected to bring in annual revenues of $150,000. The variable costs associated with the project are expected to be $80,000, while the fixed costs will be $20,000 per year. The company expects to depreciate the assets associated with the project at a rate of $5,000 per year, and the applicable tax rate is 30 percent. What is the annual operating cash flow for this project?

A.) $42,700

B.)$22,400

C.)$29,600

D.)$36,500

E.)$67,940

2.)Suppose XYZ Corporation issues bonds with a coupon rate of 8.63%, semiannual interest payments, a face value of $1,000 and a maturity date of January 1, 2025. If the market price of the bonds is currently $1,000, what is the yield to maturity on March 4, 2022

A.)5.50%

B.)higher than 8.63%

C.)8.63%

D.)6.23%

3.) Which of the following is a disadvantage of payback period approach?

A.) It does not use net profits as a measure of return.

B.)It does not examine the size of the initial outlay.

C.)It does not take into account an unconventional cash flow pattern

D.)It does not explicitly consider the time value of money.

4.) A firm is evaluating a proposal which has an initial investment of $75,000 and has cash flows of $25,000 per year for five years. The payback period of the project is ________.

A.) 2 years

B.)1.5 years

C.)4 years

D.)3 years