Question
1.The internal rate of return is a.the discount rate that makes the NPV greater than zero. b.the discount rate that makes the NPV equal to
1.The internal rate of return is
a.the discount rate that makes the NPV greater than zero.
b.the discount rate that makes the NPV equal to zero.
c.the discount rate that makes the NPV less than zero.
d.the discount rate that isequal to the NPV.
2. Strabler Motorcycle Company is evaluating a project in which there is a 40 percent probability of revenues totaling $3,000,000 and a 60 percent probability of revenues totaling $1,000,000. Its cash expenses will be $1,000,000 million while depreciation expense will be $200,000; then what is the expected free cash flow from taking the project if the marginal tax rate for the firm is 30 percent?
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