Consider a project that requires an initial cash outflow of P500,000 with a life of eight years and a salvage value of P20,000 upon its retirement. Annual cash inflow before tax amounts to P100,000 and a tax rate of 30 percent will be applicable. The required minimum rate of return for this type of investment is 8 percent. The present value of 1 and the annuity of 1, discounted at 8 percent for 8 periods are 0.54 and 5.747, respectively. Salvage value is ignored in computing depreciation. The net present value amounts to * P 7,560 P 10,050 P 17,606 P 20,050

The Sales Director of Can Can Co. suggests that certain credit terms be modified. He estimates the following effects: Sales will increase by at least 20%. Accounts receivable turnover will be reduced to 8 times from the present turnover of 10 times. Bad debts, now at 1% of sales will increase to 1.5%. Sales before the proposed changes is at P900,000. Variable cost ratio is 55% and desired rate of return is 20%. Fixed expenses amount to P150,000.Should the company allow the revision of its credit terms? * Yes, because income will increase by P68,850. Yes, because losses will be reduced by P78,800 No, because income will be reduced by P13,000. No, because losses will increase by P28,000.

Deity Company had sales of P30,000, increase in accounts payable of P5,000, decrease in accounts receivable of P1,000, increase in inventories of P4,000, and depreciation expense of P4,000. What was the cash collected from customers? * P31,000 P35,000 P34,000 P25,000

The mix of debt and equity that minimizes the cost of capital is the: * optimal operating leverage target financial structure optimal degree of combined leverage optimal capital structure

What is the effective annual interest rate on a 9% annual percentage rate automobile loan that has monthly payments? * 9% 9.38% 9.81% 10.94%