FINANCE EXPERTS!!! I need quality answers. Also please use excel if needed to show your work and answer the questions correctly.

Multiple Choice (circle the correct answer) 1. 2. 3. 4. The net present value: a. Decreases as the required rate of return increases. b. Is equal to the initial investment when the internal rate of return is equal to the required return c. Method of analysis cannot be applied to mutually exclusive projects d. Is positively related to the discount rate e. Is unaffected by the timing of an investment's cash flows Which of the following statements is correct? a. A longer payback period is preferred over a shorter payback period b. The payback rule states that you should accept a project if the payback period is less than one year c. The payback period ignores the time value of money d. The payback rule is biased in favor of long-term projects e. The payback period considers the timing and amount of all of a project's cash flows Any changes to a firm's projected future cash flows that are caused by adding a new project are referred to as which one of the following? a. Eroded cash flows b. Deviated projections c. Incremental cash flows d. Directly impacted flows e. Assumed flows The Shoe Box is considering adding a new line of winter footwear to its product lineup. Which of the following are relevant cash flows for this project? i. Decreased revenue from products currently being offered if this new footwear is added to the lineup ii. Revenue from the new line of footwear iii. Money spent to date looking for a new product line to add to the store's offerings iv. Cost of new counters to display the new line of footwear b. I and IV only c. II and IV only d. II and III only e. 1, II, and IV only f. All of them are relevant. Open-Ended (Show your work) 5. Vandelay Industries is evaluating a project that costs $1,350,000 and has a 20 year life. Depreciation will be straight-line to zero over the life of the project. Management believes they will be able to sell the equipment at the end of the project for $50,000. Sales are projected to be 50,000 units in the first year, 70,000 units in the second year, and 25,000 units for all additional years. Price per unit is $34.50, variable cost per unit is $15.50 and fixed costs are $300,000 per year. The project also requires an initial investment in net working capital of $150,000 and for the project to maintain a net working capital balance equal to $150,000 plus 15% of sales while the project is ongoing. All net working capital will be recouped at the end of the project. This project will have an additional spillover effect that will impact existing sales negatively. The net pre-tax impact of the spillover effect will be -$75,000 per year. This project will also have a positive spillover effect. Specifically, the project will generate additional sales of 100 units of an existing product at a price of $15 each. The existing product has variable costs of $9 and fixed costs of $5,000 per year. The company's marginal tax rate is 35%. The required return on similar projects is 11%. a. What is the project's NPV? b. c. What is the project's profitability index? d. 6. What is the project's payback period? Why might this company decide to pursue this project? Your company has been approached to bid on a contract to sell 4,200 voice recognition (VR) computer keyboards per year for four years. Due to technological improvements, beyond that time they will be outdated and no sales will be possible. The equipment necessary for the production will cost $3.8 million and will be depreciated on a straight-line basis to a zero salvage value. Production will require an investment in net working capital of $95,000 to be returned at the end of the project, and the equipment can be sold for $275,000 at the end of production. Fixed costs are $640,000 per year, and variable costs are $155 per unit. In addition to the contract, you feel your company can sell 9,500, 10,400, 12,500, and 9,800 additional units to companies in other countries over the next four years, respectively, at a price of $310. This price is fixed. The tax rate is 40 percent, and the required return is 10 percent. The bid price you plan to submit is $290 per unit. What is the NPV of the project? What is the IRR? How much does the NPV change if you change the bid price to $289 per unit