1) Lauren Smith buys a machine for his business. The machine costs $150,000. Lauren estimates that the machine can produce $40,000 cash inflow per year for the next five years. Lauren's cost of capital is 10 percent. What is the approximate internal rate of return?

A) 8.95%

B) 11.59%

C) 9.43%

D) 10.43%

2) Nick Addis buys a machine for his business. The machine costs $150,000. George estimates that the machine can produce $40,000 cash inflow per year for the next five years. George's cost of capital is 10 percent. What is the approximate present value of the future cash flow for George?

A) $174,212

B) $151,632

C) $191,632

D) $166,796

3) Rilye's Bike Supplies sells 5,000 boxes of drum brakes per year. She determined that she pays $50 to process an order for brakes. Her purchase price is $6 for each box of brakes and she has determined that storage costs for one year are 25 percent of the purchase price. Rilyes vendor said that if she purchased 1,000 boxes at a time, she would receive a 10 percent discount. What is her total cost if she orders her EOQ without the discount if the formula for total cost is TC=TP + (QIP/2) + (DS/Q)?

A) $28,000

B) $30,866

C) $27,925

D) $27,866

4) Mauras Bike Store also sells 5,000 boxes of drum brakes per year. She determined that she pays $50 to process an order for discs. Her purchase price is $6 for each box of brakes and she has determined that storage costs for one year are 25 percent of the purchase price. Her vendor said that if she purchased 1,000 boxes at a time, she would receive a 10 percent discount. The total cost formula is TC=DP +(QIP/2) + (DS/Q).

What is Sarah's annual ordering cost if she takes advantage of the discount?

A) $250

B) $578

C) $433

D) $675