1. Maya Company is considering a new 3 year expansion project that requires an initial fixed asset investment of $1.2 million. The fixed asset will be depreciated on a straight line basis over its 3 year life after which it will be worthless. The project is estimated to generate $1,120,000 in annual sales with annual cost of goods expense of $480,000. The company's tax rate is 35% and the required return is 12%. 17. What is Maya Company's Operating Cash Flow?

a. $156,000

b. $400,000

c. $556,000

d. $240,000

2. Using the information in question #1 above, what is Maya Company's Incremental Cash Flow (CFFA) in year 1?

a. $156,000

b. $400,000

c. $556,000

d. $(1,200,000)

3. Using the information in question #1 above, what is Maya Company's Incremental Cash Flow (CFFA) today or in year 0?

a. $156,000

b. $400,000

c. $556,000

d. $(1,200,000)

4. Using the information in question #1 above, what is the Net Present Value of Maya Company's project?

a. $556,000

b. $135,418

c. $644,000

d. $218,135

5. Using the information in question #1, what is the IRR on the Maya Company project?

a. 15.8%

b. 12%

c. 18.5%

d. none of the above