13. industrial services is analyzing a proposed investment that would initially require $489,000 of equipment. The equipment would be deprecated on a straight line basis to a zero balance over the four-year life of the project. The estimated salvage value is $170,000. The project requires $32,000 initially for net working capital all of which will be recouped at the end of the project. The projected operating cash flow is $174,900 a year. What is the internal rate of return on this project if the relevant tax rate is 20%.

14. empire industries is considering adding new product to its lineup . this product is expected to generate sales for four years after which time the product will be discontinued . what is the projects net present value at a required rate of return of fourteen . eight percent ? cash flows related to the project are as follows four years zero three four respectively negative sixty two thousand dollars sixteen thousand five hundred twenty three thousand eight hundred dollars twenty seven thousand one hundred dollars twenty two thousand one hundred dollars

15. A protective covenant:

guarantees the market price of a bond will never be less than par value

limits the actions of the lender

limits the actions of the borrower

protects the lender from unscrupulous practices by the borrower

guarantees the interest and principal payments will be paid in full on a timely basis

16. A $1000 face value bond currently has a yield to maturity of 8.52% the bond matures in five years and pays interest semi annually. The coupon rate is 7.5%. What is the current price of this bond

17. horseshoe stables is losing significant market share and thus it's managers have decided to decrease the firms annual dividend. The last annual dividend was $.86 a share but all future dividends will be decreased by 3.5% annually. What is a share of this stock worth today at a required return of 19.6%

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