QUESTION 5 Forise Water Company drills small commercial water wells. The company is in the process of analyzing the purchase of a ne drill. Information on the proposal is provided below. Initial investment: Asset $700,000 Working capital $168,000 Operations (per year for four years): Cash receipts $550,000 Cash expenditures $240,000 Disinvestment: Salvage value of drill (existing) $150,000 Discount rate 16% What is the net present value of the investment? Assume there is no recovery of working capital. $317,380 -$168,000 $310,000 $149,380 QUESTION 6 Care Inc., has two divisions that operate independently of one another. The financial data for the year 2015 reported the following results: Sales Operating income Taxable income Investment North $6,000,000 1,900,000 1,700,000 14,000,000 South $5,000,000 1,200,000 775,000 11,000,000 The company's desired rate of return is 10%. Income is defined as operating income. What are the respective return-on-investment ratios for the North and South Divisions? 12.14% and 7.05% 7.05% and 12.14% 13.57% and 10.91% 0 10.91% and 13.57%