QUESTION 1

Le Place has sales of $439,000, depreciation of $32,000, and net working capital of $56,000. The firm has a tax rate of 34% and NOPAT is 6% of sales. The firm has no interest expense. What is the amount of the operating cash flow?

		$49,384
		$52,616
		$54,980
		$58,340
		$114,340

QUESTION 2

Cape Cod Canning Co. has a new automated production line it is considering. The project has a cost of $675,000 and is expected to provide after-tax cash flows of $126,250 for 9 years. Management has found that the cost of capital is 9.5 percent. What is the projects IRR?

		12.9%
		7.8%
		9.5%
		11.9%

QUESTION 3

A futures trader who bets on the future direction of prices by taking either a long or a short position is called a:

		hedger
		short seller
		speculator
		dealer

QUESTION 4

What is the fundamental purpose of a stock split?

		A split shows the companys preference for retaining funds.
		A split increases the threat of a hostile takeover.
		A split immediately increases the investors wealth.
		A split immediately brings the stock price to a lower trading range.

QUESTION 5

Kurt's Kabinets is looking at a project that will require $80,000 in fixed assets and another $20,000 in net working capital. The project is expected to produce sales of $110,000 with associated costs of $70,000. The project has a 4-year life. The company uses straight-line depreciation to a zero book value over the life of the project. The tax rate is 35%. What is the operating cash flow for this project?

		$7,000
		$13,000
		$27,000
		$33,000
		$40,000