1.For project A in year 2, inventories decrease by 5000 and accounts payable increase by 1500. Accounts receivable remain the same. Calculate the increase or decrease in net working capital for year 2.

2. You would like to have enough money saved to receive $100000 per year in perpetuity after retirement for you and your heirs. How much would you need to have saved in your retirement fund to achieve this goal? (Assume that the perpetuity payments start one year from the date of your retirement. The annual interest rate is 5 percent.)

3. The market value of Cable Company's equity is $25 million and the market value of its debt is $15 million. If the required rate of return on the equity is 13 percent and that on its debt is 5 percent, calculate the company's cost of capital. (Assume no taxes.)

4. LOWTEC Sustainable AG is a German company specialized in energy-efficient technology for buildings. Given are the following estimated data for year 2017: Profit after taxes = 35 million; Depreciation = 28 million; Investment in fixed assets = $50 million; Investment net working capital = $4 million. Calculate the estimated free cash flow (FCF) for year 2017

5. The market value of Greenergy ltd equity is $130 million and the market value of its debt is $40 million. If the required rate of return on the equity is 18 percent and that on its debt is 5 percent, calculate the company's cost of capital. (Assume no taxes.)