1. Domebo Corporation has entered into a 5 year lease for a piece of equipment. The annual payment under the lease will be $2,200, with payments being made at the beginning of each year. If the discount rate is 12%, the present value of the lease payments is closest to (Ignore income taxes.): Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided. (Round your intermediate calculations to 3 decimal places.)

2. You have deposited $13,604 in a special account that has a guaranteed rate of return. If you withdraw $2,000 at the end of each year for 9 years, you will completely exhaust the balance in the account. The guaranteed rate of return is closest to: (Ignore income taxes.)

3. Charlie Corporation is considering buying a new donut maker. This machine will replace an old donut maker that still has a useful life of 6 years. The new machine will cost $3,670 a year to operate, as opposed to the old machine, which costs $3,975 per year to operate. Also, because of increased capacity, an additional 20,700 donuts a year can be produced. The company makes a contribution margin of $0.10 per donut. The old machine can be sold for $7,700 and the new machine costs $30,700. The incremental annual net cash inflows provided by the new machine would be (Ignore income taxes.):

4. Welch Corporation is planning an investment with the following characteristics (Ignore income taxes.):

Useful life		11	years
Yearly net cash inflow	$	40,000
Salvage value	$	0
Internal rate of return		13	%
Required rate of return		9	%

Initial cost of the equipment is closest to:

5. Coache Corporation is considering a capital budgeting project that would require an investment of $200,000 in equipment with a 4 year useful life and zero salvage value. The annual incremental sales would be $640,000 and the annual incremental cash operating expenses would be $510,000. In addition, there would be a one-time renovation expense in year 3 of $27,000. The companys income tax rate is 30%. The company uses straight-line depreciation on all equipment.

The total cash flow net of income taxes in year 3 is: