Smiley Corp. is considering a 7-year project for their new gaming products. They need to set up a new virtual reality lab for $45,000. The new lab can decrease their net working capital for $8,000. Smiley expects $15,400 in sales and $6,900 annual operating expenses. Annual depreciation is $5,000. If the firm's tax rate is 21% and its cost of capital is 9%.

44) How much is their annual OCF?

A.) 7,765

B.) 3,500

C.) 10,127

D.) 4,859

What is the NPV of this project assuming same CF for 7 years?

A.) 2,081

B.) -1,281

C.) 8,408

D.) -5,919

37 Internal Rate of Return decision rule is that: If the IRR is _______ the cost of capital, _______ the project.

A.) Greater than; reject

B.) Less than; accept

C.) Less than; reject

D.) None of the above