A capital budgeting project requires the purchase of fixed assets at a cost of $520,000. An initial investment in net working capital of $70,000 is also necessary. The initial cash outflow or cash outflow for t = 0 is $70,000 $450,000 $520,000 $590,000 The following project cash flows have been estimated for a capital budgeting project. The firm's cost of capital is 9%. What is the Net Present Value? Should you accept or reject? t Project Cash Flows O ($130,120) 1 $50,000 2 $70,000 3 $30,000 $127.995, accept the project $127,995. reject the project ($2,165), reject the project $2,165, accept the project The following project cash flows have been estimated for a capital budgeting project. The firm's cost of capital is 9%. What is the Internal Rate of Return? Should you accept or reject? t Project Cash Flows O ($130,120) 1 $50,000 2 $70,000 3 $30,000 7%, reject the project 9%, accept the project 8%, reject the project 10%, accept the project The following project cash flows have been estimated for a capital budgeting project. The firm's cost of capital is 7%. What is the Payback Period? t Project Cash Flows O ($240,000) 1 $100,000 2 $90,000 3 $80,000 4 $10,000 2.78 years 2.63 years 2.38 years 3.63 years A capital budgeting project will produce new revenues of $50,000 each year for 5 years. It will require purchase of equipment for $75,000. The equipment has a depreciable life of 3 years, and it will be depreciated using the straight-line method. The annual operating costs will be $15,000, and the income tax rate is 21%. Estimate the project cash flow for Year 1. $7.900 $17,900 $32.900 $37,650 Set your calculator to at least 3 decimal places. You purchased common stock one year ago for $68.20 per share. It paid a $6 dividend over the past year. Today it is selling for $66.43 per share. Calculate your one- period return. +5.0% +11.4% +6.2% +6.4%