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4. Using the information from Question Three (above) calculate the Profitability Index for the Loule Company investment. a) 1.01 b) 1.06 c) 1.11 d) 1.95

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4. Using the information from Question Three (above) calculate the Profitability Index for the Loule Company investment. a) 1.01 b) 1.06 c) 1.11 d) 1.95 5. Using the information from Question Three (above) compute the IRR of this investment for the Louie Company. a) 6.6% b) 8.8% c) 11.8% d) 12.9% 6. Should the Louie investment be accepted by the company? Why or Why Not? a) Yes b) No 7. The Snoopy Company produces steak knives for the finest dining parlors in the world. They plan to spend $11,000 to redesign the logo on the knife which will, they believe, generate incremental free cash flows as follows; FCF Year One $4,000 : FCF Year Two $4,000 : and FCF Year Three of $6,000. What is the Internal Rate of Return for this project? a) 10.50% b) 12.15% c) 14.15% d) 16.50% 4. Using the information from Question Three (above) calculate the Profitability Index for the Loule Company investment. a) 1.01 b) 1.06 c) 1.11 d) 1.95 5. Using the information from Question Three (above) compute the IRR of this investment for the Louie Company. a) 6.6% b) 8.8% c) 11.8% d) 12.9% 6. Should the Louie investment be accepted by the company? Why or Why Not? a) Yes b) No 7. The Snoopy Company produces steak knives for the finest dining parlors in the world. They plan to spend $11,000 to redesign the logo on the knife which will, they believe, generate incremental free cash flows as follows; FCF Year One $4,000 : FCF Year Two $4,000 : and FCF Year Three of $6,000. What is the Internal Rate of Return for this project? a) 10.50% b) 12.15% c) 14.15% d) 16.50%

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