Hello, can you please help me with these questions for financial management? I'd greatly appreciate it. Thank you.

Directions:

The figures can be typed into the formula.

7.) Two projects, Alpha and Beta, are being considered using the payback method. Each has an initial cost of $100,000. The annual cash flows for each project are listed below.

Year Project Alpha Project Beta

1 25,000 15,000

2 25,000 25,000

3 25,000 45,000

4 25,000 30,000

5 25,000 20,000

6 25,000 15,000

a) What is the pay back period in years for Alpha? (round to two decimal places)

b) What is the pay back period in years for Beta? (round to two decimal places)

8.) A fitness equipment manufacturer is capitalized with long-term debt, preferred stock and common stock. The amount and cost of each capital source is in the table below. The cost of debt is the after-tax cost.

What is the firm's weighted average cost of capital? (round to two decimal places)

Amount ($) Cost (%)

Long-term debt800,000 4%

Preferred stock350,000 5%

Common stock3,900,000 8%

Total 5,050,000

9.) A flour mill is considering buying a new jumbo sifter, which would have an installed cost of $80,000. The new one would replace the existing sifter that was purchased 3 years ago at an installed cost of $60,000. If the company moves forward with the replacement, it could sell the old sifter for $19,000. Purchasing the new sifter would result in the company's current assets increasing by $10,000 and current liabilities increasing by $8,000. The company uses the 5-year MACRS table for depreciation and is taxed at 21%.

a) What is the accumulated depreciation of the old sifter?

b) What is the current book value of the old sifter?

c) What is the amount of depreciation recapture/recovery?

d) What is the tax on the sale of the old sifter?

e) What are the after-tax proceeds from the sale of the old sifter?

f) What is the change in Net Working Capital?

g) What is the initial investment for the project?