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6. Compute the payback period (in years) for a moon-landing project with the following CFs. Initial Outlay = $450; CF1 = $325; CF2 = $65; CF3 = $100. a. 2.60 b. 2.17 c. 3.13 d. 4.00

7. The IRR for a project is the discount rate that: a. sets the PV of the projects future cash inflows equal to the initial cash outflow. b. sets the NPV of the project equal to zero. e. makes the PV of the future cash flows c. makes the NPV negative. greater than zero. d. makes the NPV positive. f. a and b are both correct

. 8. Lew Iss See Kay LLP (LISKL) is currently evaluating an investment in a new comedy club. The club is expected to last for 4 years and generate a CF1 = $11,000, CF2 = $9,680, CF3 = $10,648, and CF4 = $58,564. The initial outlay is $20,000. Using a required return of 10%, calculate the discounted payback period for LISKLs comedy club. (All answers below are expressed in years.) a. 2.19 b. 2.25 c. 2.00 d. 1.93 e. 3.00

9. A proposed new project has projected sales of $85K, costs of $43K, and depreciation expense of $3K. All figures are annual figures. The tax rate is 35%. Calculate annual operating CF for this project. a. $27,300 b. $14,700 c. $42,000 d. $28,350

10. For the prior problem, calculate how many dollars of tax expense are saved each year because of the depreciation expense. a. $1,050 b. $1,950 c. $3,000 d. $1,000