Harry's Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that if a project's projected NPV is negative, it should be rejected. WACC: 10.75% Year 0 1 2 3 4 5 Cash flows -$1,000 $330 $330 $330 $330 $330

a. $489.84 b. $359.30 c. $205.29 d. $650.00 e. $227.36

Warr Company is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected. Year 0 1 2 3 4 Cash flows -$1,540 $425 $425 $425 $425

a. 7.02% b. 2.60% c. 10.39% d. 4.07% e. 2.50%

Moerdyk & Co. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the higher IRR, how much value will be forgone? Note that under certain conditions choosing projects on the basis of the IRR will not cause any value to be lost because the one with the higher IRR will also have the higher NPV, i.e., no conflict will exist. WACC: 6.75% 0 1 2 3 4 CFS -$1,025 $650 $450 $250 $50 CFL -$1,025 $100 $300 $500 $700

a. $63.20 b. $0.00 c. $59.20 d. $55.46 e. $154.01

Your company, CSUS Inc., is considering a new project whose data are shown below. The required equipment has a 3-year tax life. Under the new law, the equipment used in the project is eligible for 100% bonus depreciation, so the equipment will be fully depreciated at t = 0. The equipment has no salvage value at the end of the projects life, and the project does not require any additional operating working capital. Revenues and operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 4 cash flow? Equipment cost $70,000 Sales revenues, each year $37,500 Operating costs $21,300 Tax rate 25.0%

a. $12,150 b. $16,200 c. $17,983 d. $12,960 e. $20,250