Exercise Questions 1)Coquitlam Construction Inc. has recently bought an asset costing $525,000. The asset assumes a useful of 4-year, $90,000 salvage value, and is depreciated on a straight-line method. It is reported that the company posted net income of $15,000,$18,500,$20,000, and $21,000 over the last four years. Calculate the company's average accounting return over the past four years based on the information given above (Show all necessary calculations.) (25 marks) 2)Project Alpha and Beta have 4 year timelines. Project Alpha has an initial investment of $100,000 and cash inflows of $60,000, $50,000,$40,000 and $40,000. Project Beta has an initial investment of $75,000 and cash inflows of $50,000,$40,000, $30,000 and $30,000. Calculate the IRR of the differential cashflows between the two projects at which the company will be indifferent (Show all necessary calculations.) (25 marks) 3)Gamma project has a useful life of 4 year with an initial cost of $1,000,000. The expected cash inflows for the next four years are $600,000,$500,000,$400,000, and $400,000, respectively. Compute the discounted payback period for the gamma project assuming the rate of return at 12% (Show all necessary calculations.) (15 marks) 4) Amazon luxury Inc. is evaluating the following two mutually exclusive projects. The company estimates that the required rate of return is 10.75 percent for project A and 12 percent for project B. Which project should the company accept and why? (20 marks) 5) Telus Brewery Inc. is purchasing a new asset of $225,000 and is expected to have useful life for five years with no salvage value. The company will use a 30% CCA rate as per the appropriate classification of the asset. The new asset will save $90,000 annually before taxes. Using the tax shield approach, calculate the NPV of the purchase. The company's required rate of return is 11%, with a tax rate of 30%. (15 marks)