1.In year four, Ellis LLC had EBIT of 400. Taxes were 40% and depreciation was 25. What was cash flow in year four? A. 240 b. 255 c. 265 d. None of the above

2.Todd LLC is investing in a new machine that costs $200,000. The new machine would generate cash flow of $150,000 for each of the next three years. Todd uses a discount rate of 10%. What is the net present value? A. $142 b. $173 c. $189 d. $201

3.As the interest rate used to discount future cash flows is decreased. Present value of the future cash inflows: a. increases b. decreases c. stay the same

4.Jones LLC is investing in a new piece of equipment that costs $300,000. The new equipment would generate cash flows of $200,000 for each of the next three years. Jones uses a discount rate of 12%. What is the payback (in years)? A. 1 b. 1.25 c. 1.50 d. 1.75