1.

What is the cost of debt for Sunrise Bakery?

2.

What is their cost of equity?

3.

What is the WACC?

4.

Which cost of capital should be used to evaluate the feasibility of the oven purchase?

5.

Calculate the annual depreciation expense for sunrise capital.

6.

What is the after-tax net income in each of the six years?

7.

Calculate the change in working capital each year from the projected financial statements.

8.

What is the terminal value of the project at the end of year 6?

9.

Compute the free cash flows for each year.

10.

What is the IRR?

11.

Calculate the NPV.

12.

Using Payback Analysis, how many years until the project pays off the investment?

13.

What is the return on invested capital?

14.

Should Sunrise Bakery purchase the new oven?