1.Fool Proof Software is considering a new project whose data are shown below. The equipment that will be used has a 3-year class life and will be depreciated by the MACRS depreciation system. Revenues and Cash operating costs are expected to be constant over the project's 10-year life. What is the Year 1 after-tax net operating cash flow? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

Equipment cost (depreciable basis)

$85,000

Sales revenues, each year

$70,000

Cash operating costs

$29,000

Tax rate

25.0%

2.Large Manufacturing, Inc. is considering investing in some new equipment whose data are shown below. The equipment has a 3-year class life and will be depreciated by the MACRS depreciation system, and it will have a positive pre-tax salvage value at the end of Year 3, when the project will be closed down. Also, some new working capital will be required, but it will be recovered at the end of the project's life. Revenues and cash operating costs are expected to be constant over the project's 3-year life. What is the project's Initial Cash Outlay at time 0? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

WACC

11.0%

Net investment in fixed assets (depreciable basis)

$70,000

Required new working capital

$10,000

Sales revenues, each year

$95,000

Cash operating costs excl. depr'n, each year

$30,000

Expected pretax salvage value

$9,000

Tax rate

30.0%

3.Using the information from problem 2 on Large Manufacturing, Inc., what is the Year 1

Net Operating Cash Flow? Enter your answer rounded to two decimal places. Do not

enter $ or comma in the answer box. For example, if your answer is $12,300.456 then

enter as 12300.46 in the answer box.

4.Using the information from problem 2 on Large Manufacturing, Inc., what is the

Terminal Year Non-Operating Cash Flow at the end of Year 3? Enter your answer

rounded to two decimal places. Do not enter $ or comma in the answer box. For

example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

5. Using the information from problem 2 on Large Manufacturing, Inc., what is the

project's NPV? Enter your answer rounded to two decimal places. Do not enter $ or

comma in the answer box. For example, if your answer is $12,300.456 then enter as

12300.46 in the answer box.

6. A project's base case or most likely NPV is $50,000, and assume its probability of

occurrence is 60%. Assume the best case scenario NPV is 70% higher than the

base case and assume the worst scenario NPV is 30% lower than the base case. Both

the best case scenario and the worst case scenario have a 20% probability of

occurrence. Find the project's coefficient of variation.Enter your answer rounded to

two decimal places. For example, if your answer is 12.345 then enter as 12.35 in the

answer box.