Question
1. Pelvis International is considering purchasing robotic equipment using the following estimates: Cost of robotics $4,000,000 Useful life 10 years Annual Net Cash flows $900,000
1. Pelvis International is considering purchasing robotic equipment using the following estimates:
Cost of robotics $4,000,000
Useful life 10 years
Annual Net Cash flows $900,000
The desired Rate of Return is 12%. Use the PVA table from Exhibit 5 on page 573 to estimate the NPV of the equipment.
A) $1,850,000
B) $1,530,500
C) $1,004,000
D) $1,085,000
2. JoJo Starbuck, Inc reports the following:
Net Income $562,000
Preferred Dividends 50,000
Shares of common outstanding 80,000
Market price per share $32.00
What is a) the EPS per common share and b) the price-earnings ratio (rounded to 1 decimal place), respectively?
A) $7.03 and 4.6
B) $6.40 and 5.0
C) $11.24 and 8.1
D) $12.44 and 8.8
3. A project is estimated to cost $524,860 and provide annual net cash flows of $115,000 for 7 years. Determine the internal rate of return for this project, using the Present Value of an Annuity table from Exhibit 5 on page 573 of your textbook. (managerial accounting)
A) 7%
B) 11.8%
C) 12.0%
D) 12.3%
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