18) For this and the next question: Consider the following mutually exclusive projects, P and Q with r = 10%: Which of the two projects should be accepted?

Year	P	Q
0	-$1,100	-$1,100
1	800	200
2	500	400
3	100	1,000

A) Both projects

C) Project Q, because its NPV is $163.71

D) None of the projects should be selected

22) For this and the next question (Assume earnings growth): Aon Electronics has EBIT of $200,000, a growth rate of 6%, and faces a tax rate of 40%. In order to support growth, Aon must reinvest 20% of its EBIT in net operating assets. The firm has $300,000 in 8% debt outstanding. A similar company with no debt has a cost of equity of 11% (i.e. rEU = 11%). According to the MM extension with growth, what is the value of Aon's interest tax savings?

A) $87,273

C) $288,000

D) $192,000

E) $300,000

27) INTERNATIONAL FINANCE. Suppose you wish to invest $50,000 today in German securities earning 5% per year. What is your investment value 3 years from today - in U.S. dollars - if, if at that time the direct quote for the euro is $1.35? Assume the current spot exchange rate is $1.30.

B) $44,524.04

C) $52,500.00

D) $60,107.45

E) None of the above