1) Growth Enterprises believes its latest project, which will cost $88,000 to install, will generate a perpetual stream of cash flows. Cash flow at the end of the first year will be $7,000. What is the project IRR?

2)Growth Enterprises believes its latest project, which will cost $88,000 to install, will generate a perpetual growing stream of cash flows. Cash flow at the end of the first year will be $7,000, and cash flows in future years are expected to grow indefinitely at an annual rate of 5%. What is the project IRR?

3) Consider a project with the following cash flows:

CF0=$100 million, CF1=$-60 million, CF2=$-60 million.

Should you accept or reject the project if the discount rate is 12%?

4) A project has the following the cash flows:

Year CF 0 ?$200 1 $80 2 $80 3 $80

4 $80

What is the discounted payback period if the OCC is 11%?

5) a) What is the cash flow from operations for Firm A: $75,000 sales, $2,000 cash dividends, $50,000 COGS, $4,000 administrative expenses, $3,000 depreciation expense, $5,500 interest expense, no changes in working capital, and a tax rate of 35%?

b) What is the cash flow from operations for Firm B: $55,000 net income, $5,000 depreciation, inventories increased by $10,000, A/R decreased by $10,000, and net fixed assets increased by $15,000?

6) Based on the corporate tax table below, what is the average tax rate for a firm with $120,000 taxable income?

Taxable Income Marginal Tax Rates

$0 - 50,000 15%

50,001 - 75,000 25%

75,001 - 100,000 34%

100,001 - 335,000 39%

335,001 - 10,000,000 34%

10,000,001 - 15,000,000 35%

15,000,001 - 18,333,333 38%

18,333,334 + 35%