46. The capital budgeting director is evaluating a project which costs $200,000, is expected to last for 10 years and to produce after-tax cash flows, including depreciation, of $44,503 per year. If the cost of capital of the firm is 14 percent, what is the project's IRR (tax rate =40 percent)? a. 8% b. 14% c. 18% d. 5% e. 12% 47. If a company uses the same discount rate for evaluating all projects, which of the following results is likely? a. Accepting poor, high-risk projects. b. Rejecting good, low-risk projects. c. Accepting only good, low risk projects. d. a and b above. e. Accepting no projects. 48. Your parents start saving for your sister's college education. She will begin college at age 18 and will need $4,000 per year at the end of each of the next 4 years. They will make a deposit one year from today in an account which pays 6% compounded annually, and an identical deposit each year including the year she starts college. If a deposit of $1,987 will allow them to reach their goal, how old is your sister now? a. 15 b. 10 c. 14 d. 16 e. 12 49. Your subscription to Jogger's World Monthly is about to run out and you have the choice of renewing it by sending in the $10 a year regular rate or of getting a lifetime subscription to the magazine by paying $100. Your cost of capital is 7 percent. How many years would you have to live to make the lifetime subscription the better buy? Payments for the regular subscription are made at the beginning of each year. (Round up if necessary to obtain a whole number of years.) a. 15 years b. 10 years c. 18 years d. 7 years c. 8 years