1. BRB Co. has the opportunity to introduce a new product. BRB expects the product to sell for P60 and to have per-unit variable costs of P30 and annual fixed costs including depreciation is P3,000,000. Expected annual sales volume is 120,000 units. The equipment needed to bring out the new product costs P5,000,000, has a four-year life and no salvage value, and would be depreciated on a straight-line basis. BRB's cost of capital is 10% (use 3.170 for PV factors). Its income tax rate is 35%. Compute for the: A. Annual after-tax cash flows for this opportunity. B. Payback period. (2 decimal places) C. Book rate of return based on original investment D. NPV for this project. E. Profitability index

2. Cyclops has an investment opportunity with a cost of capital equal to 8% costing $300,000 that is expected to yield the following after tax cash flows over the next six years: (Round PV factors to three decimal places in all cases) Year One $100,000 Year Two $90,000 Year Three $80,000 Year Four $70,000 Year Five $60,000 Year Six $50,000

A. Find the payback period on this project. B. Find the discounted payback period of this project. C. Find the NPV for this project.

3. EEL Company common stock is selling at P62.50/share while flotation cost of P5/share. The current dividend per share is P5.42/share. Growth rate projected at 5%. Compute for the: A. cost of common stock and B. retained earnings. (Non-anonymous question