Dog Up! Franks is looking at a new sausage system with an installed cost of $348,950. This cost will be depreciated straight-line to zero over the project's six-year life, at the end of which the sausage system can be scrapped for $50,000. The sausage system will save the firm $134,400 per year in pretax operating costs, and the system requires an initial investment in net working capital of $19,500. All of the net working capital will be recovered at the end of the project. The tax rate is 35 percent and the discount rate is 12 percent. What is the net present value of this project?

$109,622.83

$107,820.59

$81,507.41

$98,441.14

$100,756.77

Next year, Jensens will pay an annual dividend of $2.75 per share. The company has been reducing the dividends by 10 percent annually. How much are you willing to pay today to purchase stock in this company if your required rate of return is 11.5 percent?

$11.92

$17.87

$12.79

18.33

$16.50

Oil Wells offers 6.5 percent coupon bonds with semiannual payments and a yield to maturity of 6.94 percent. The bonds mature in seven years. What is the market price per bond if the face value is $1,000?

$989.70

$975.93

$996.48

$902.60

$913.48

You have just made a $1,500 contribution to your individual retirement account. Assume you earn a rate of return of 8.7 percent and make no additional contributions. How much more will your account be worth when you retire in 25 years than it would be if you waited another 5 years before making this contribution?

$6,306.16

$4,658.77

$3,311.18

$6,907.17

$4,117.64