24) In a stream of past dividends, the initial dividend is $1.25 and the most recent dividend is $1.80. The number of years between these two dividends (n) is 9 years. What is the average growth rate during this seven-year period? Use a calculator to determine your answer. 24) ______ A) 7.35% B) 5.35% C) 6.35% D) 4.13% 25) Bacon Signs Inc., purchases a machine for $70,000. This machine qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%, etc. The firm has a tax rate of 34%. If the machine is sold at the end of two years for $50,000, what is the cash flow from disposal? 25) ______ A) $39,875 B) $44,424 C) $43,440 D) $33,600 26) Mulligan, Inc. is currently considering an eight-year project that has an initial outlay or cost of $140,000. The cash inflows from its project for years 1 through 8 are the same at $35,000. Mulligan has a discount rate of 13%. Because there is a shortage of funds to finance all good projects, Mulligan wants to compute the profitability index (PI) for each project. That way Mulligan can get an idea as to which project might be a better choice. What is the PI for Mulligan's current project? 26) ______ A) About 1.18 B) About 1.24 C) About 1.20 D) About 1.09 27) Find the Modified Internal Rate of Return (MIRR) for the following series of future cash flows, given a discount rate of 11%: Year 0: -$22,000; Year 1: $5,000; Year 2: $6,000; Year 3: $9,000; Year 4: $7,500; and, Year 5: $8,000. 27) ______ A) About 12.13% B) About 12.88% C) About 13.12% D) About 14.45% 28) Rogers' Rotors has debt with a market value of $250,000, preferred stock with a market value of $50,000, and common stock with a market value of $750,000. If debt has before-tax cost of 7%, preferred stock a cost of 9%, common stock a cost of 11%, and the firm has a tax rate of 34%, what is the WACC? 28) ______ A) 9.12% B) 8.64% C) 10.88% D) 9.39% 29) Geronimo, Inc. is considering a project that has an initial outlay or cost of $220,000. The respective future cash inflows from its four-year project for years 1 through 4 are: $50,000, $60,000, $80,000, and $90,000, respectively. Geronimo uses the internal rate of return method to evaluate projects. Will Geronimo accept the project if its hurdle rate is 10%? 29) ______ A) Geronimo will not accept this project because its IRR is about 6.50%. B) Geronimo will not accept this project because its IRR is about 9.36%. C) Geronimo will not accept this project because its IRR is about 8.70%. D) Geronimo will not accept this project because its IRR is about 4.60%.