3.What is the payback if investment cost is $45,000 and the after tax benefit is $2,000?

4- An interest payment of $650 in a 20 percent tax bracket would result in a tax savings of _____.

5- Joe Morton buys a piece of equipment for $200,000. He puts down $40,000 and finances $160,000. Joe's opportunity cost is 4 percent and the lender's interest rate is 8 percent. Find the weighted average cost of capital (WACC).

6- Lisa Camry bought a $15,000 car with a $3,000 down payment. The balance is financed by a manufacturer's sale offering 0-percent annual interest. If Lisa's opportunity cost is 5 percent, what is her WACC?

7- What is the relationship between NPV and profitability index (PI)?

8- What are the advantages of the PI method of capital budgeting?

9- How does the accounting rate of return (ARR) differ from the internal rate of return (IRR)?

10- List the advantages and disadvantages of the payback method.