Mestek Company has the following information related to a new project: Initial investment: $1,580,000; Fixed costs: $320,000; Variable costs: $14.80 per unit; Selling price: $31.50 per unit; Discount rate: 13 percent; Project life: 7 years; Tax rate: 25 percent. Fixed assets are depreciated using straight-line depreciation over the project's life. What is the financial break-even point?

47,608 units

43,180 units

40,216 units

37,680 units

34,659 units

Skyline Champion has sales of $620,000, net income of $93,000, net fixed assets of $1,116,000, and current assets of $248,000, of which $208,000 is inventory. What is the common-size statement value of inventory?

16.49%

16.11%

15.63%

15.25%

14.78%

Assume a machine costs $602,000 and lasts seven years before it is replaced. The operating cost is $120,400 a year. Ignore taxes. What is the equivalent annual cost if the required rate of return is 14 percent? (Hint: the EAC should account for both initial investment and annual operating costs)

$225,968.47

$236,373.32

$243,162.45

$252,849.37

$260,781.81

Nephros Company is analyzing a project and has determined that the initial cost will be $720,000 and the required rate of return needs to be 15 percent. The project has a 60 percent chance of success and a 40 percent chance of failure. If the project fails, it will generate an annual after-tax cash flow of $145,000. If the project succeeds, the annual after-tax cash flow will be $320,000. The company has further determined that if the project fails, it will shut the project down after the first year and sell the equipment for the after-tax salvage value of $230,000. If however, the project is a success, the company can expand it with no additional investment and increase the after-tax cash flow to $340,000 a year for Years 2-5. At the end of Year 5, the project would be terminated and have no salvage value. What is the expected net present value of this project at Time 0?

$78,216.54

$83,839.64

$88,247.45

$93,180.72

$98,661.54

Dorel Industries is considering an investment project that will produce an operating cash flow of $407,000 a year for five years. The initial cash outlay for equipment will be $1,318,000. An aftertax salvage value of $105,440 for the equipment will be received at the end of the project. The project requires $197,000 of net working capital that will be fully recovered. What is the net present value of the project if the required rate of return is 14 percent?

$98,043.66

$20,195.73

$39,005.37

$56,203.51

$74,418.26

Horton Company is considering an investment project that generates a cash flow of $2,100,000 next year if the economy is favorable but generates only $850,000 if the economy is unfavorable. The probability of favorable economy is 60% and of unfavorable economy is 40%. The project will last only one year and be closed after that. The cost of investment is $1,450,000 and the company plans to finance the project with $470,000 of equity and $980,000 of debt. Assuming the discount rates of both equity and debt are 0%. What are the expected cash flows to the company's creditors and shareholders if the company invests in the project?

$980,000 to creditors and $672,000 to shareholders

$928,000 to creditors and $672,000 to shareholders

$928,000 to creditors and $1,120,000 to shareholders

$0 to creditors and $1,120,000 to shareholders

$980,000 to creditors and $0 to shareholders

Lennar Distributions has total sales of $484,000, costs are $235,000, and depreciation is $28,000. The tax rate is 25 percent. The interest expense is $8,000. What is the operating cash flow?

$221,000

$213,000

$177,250

$53,250

$195,750