Question
1) Rust Industries runs a small manufacturing operation. For this fiscal year, it expects real net cash flows of $197,000. The company is an ongoing
1) Rust Industries runs a small manufacturing operation. For this fiscal year, it expects real net cash flows of $197,000. The company is an ongoing operation, but it expects competitive pressures to erode its real net cash flows at 6 percent per year in perpetuity. The appropriate real discount rate for the project is 11 percent. All net cash flows are received at year-end. What is the present value of the net cash flows from the company's operations?
Group of answer choices
$1,880.35
$1,000.00
$58,823.53
$823.50
$1,158,823.53
2) Rust Industries runs a small manufacturing operation. For this fiscal year, it expects real net cash flows of $197,000. The company is an ongoing operation, and it expects its net cash flows to grow at 6 percent per year indefinitely. The discount rate for the project is 11 percent. All net cash flows are received at year-end. What is the present value of the net cash flows from the company's operations?
Group of answer choices
$823.50
$1,000.00
$58,823.53
$3,940,000
$1,880.35
3) Uptown Furniture wants to build a new retail store. The building cost is estimated at $1.6 million. The company had to spend $40,000 on feasibility research for the project. What amount should be used as the initial cash flow for this building project?
Group of answer choices
$2,385,000
$2,240,000
$1,600,000
$1,640,000
$2,270,000
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