Some tricky questions below that I need some help with!

Question 1 Not yet answered Marked out of 1.00 '7 Flag question Question 2 Not yet answered Marked out of 1.00 '7 Flag question You havejust won the lottery. The Lottery Corporation offers you two options: a a lump-sum payment of $1 million, or 0 an annual installment of $100,000 over the next 15 years. At what interest rate, r, will you be indifferent between the two options? Select one: C\" a. 10.00% 0 b. 7.75% C\" c. 5.56% C\" d. 2.74% C\" e. 50.00% The formula Annual Payment I (r - g) calculates the Select one: C\" a. future value of an annuity due. C\" b. present value of a growing annuity. C\" c. present value of a perpetuity. C\" d. future value ofa perpetuity. C\" e. present value of a growing perpetuity. Question 3 Regulations for Canadian nancial institutions require that mortgage rates be quoted with Answer saved Marked out of 1.00 SEIeCt one '7 Flag question A a. continuous compounding. A b. monthly compounding. A c. quarterly compounding. A d. semi-annual compounding. o e. annual compounding. Questlon4 When you go into a car dealership to buy a car, the car salesman must quote the nancing rate in terms of Answer saved Marked out of 1.00 Select 0'19: C\" a. effective annual rate. V Flag question C\"; b. effective periodic rate. C\"; c. periodic percentage rate. C\" d. annual market rate. 0 e. annual percentage rate. Question 5 Juliet has a 10-year mortgage of $500,000 with an interest rate of 3.5% APR, compounded quarterly. Mortgage payments are made at Notyetanswered the beginning of each month. What is the balance remaining on this mortgage after the 60th payment? Marked out of 1.00 V , Select one: Flag question 1/\" a. $216,077 C\"; b. $270,937 C\" c. $275,065 C\"; d. $266,797 C\"; e. $250,000 Question 6 A 10-year investment will pay $1,800 at the end of this year, and the payments will grow at a rate of 5% per year. The required return is l Quiz Enswered 12%, What is the present value of this investment? Marked out of1.00 Select one: A a. $5,590.53 A b. $6,985.47 A c. $10,170.40 A d. $12,228.16 A e. $25,714.29 '7 Flag question Question 7 Not yet answered Marked out of 1.00 " Flag question Question 8 Not yet answered Marked out of 1.00 7 Flag question An investment will pay $225 per year (indenitely), starting in one year's time. The annual payments will grow at a rate of 3% per year. If the price of this investment is $2,000, what is its rate of return? Select one: C a. 11.25% A b. 14.00% A c. 14.25% A d. 15.00% A e. 17.25% Mike Smithjust turned 16 years old. He wishes to buy a used car in two years, and he is willing to spend $8,000. He plans to work part- time and put all his monthly earnings into a bank account that will pay 0.25% interest per month. How much must he save per month in order to be able to purchase the car in two years? Select one: A a. $754.72 A b. $416.67 A c. $405.33 A d. $333.33 A e. $323.85 \fQuestion 10 What is the effective annual rate on an investment that pays an interest of 6.25% continuously? Not yet answered Marked out of 1.00 SEqu one: " Flag question A a' 645% C b. 6.72% A c. 6.35% C d. 4.47% (7 e. 8.68% Question 1 Not yet answered Marked out of 'I .00 '7 Flag question Question 2 Not yet answered Marked out of 1.00 '7 Flag question The process of capital budgeting frequently involves the estimation of cash inows and outows generated by the project itself, outside of the normal operations of a rm. This type of process demonstrates the principle. Select one: C\" a. common ground C\" b. stand-alone C\" c. Modiglianiand Miller C\" d. diversication C\" e. opportunity cost Hub.com is considering a new product called A-Plus for its customers. However, the introduction of this new product is expected to lower the revenues received from Hub.com's existing lines of products by $100,000 per month. The lowered revenues are considered Select one: C\" a. a sunk cost. C\" b. an opportunity cost. C\" c. a side effect. C\" d. an erosion. C\" e. b, c, and d are all correct. Question 3 Iota Inc. is considering taking on a project. At the initiation ofthis project, the company will experience an increase in accounts receivable of $50,000, a decrease in inventory of $10,000, and an increase in accounts payable of $15,000. What is the effect of these Not yet answered . . _ _ changes In net working capital on the preject's cash ows? Marked out of 1.00 '7 Flag question Select one: A a. There is no effect as these are not incremental cash ows of the project. A b. Initial cash outow to the project will decrease by $25,000. A c. Initial cash outow to the project will increase by $25,000. A d. Initial cash inflow to the project will increase by $25,000. A e. Annual cash ow will decrease by $25,000. Questlon 4 Not yet answered Marked out of 1.00 '7 Flag question Question 5 Not yet answered Marked out of 1.00 '7 Flag question A project's after-tax operating cash ow is $200,000 per year, with operating costs of $100,000 and depreciation of $20,000 per yea r. The rm's marginal tax rate is 30%. What are the annual sales revenues from this project? Round your answer to the nearest dollar. Select one: C a. $184,800 A b. $194,285 A c. $200,000 A d. $377,143 A e. $394,286 Jabba-Dabba-Doo Inc. renovated its warehouses exactly two years ago at a cost of $3 million. The renovations were considered leasehold improvement, and the cost was therefore subject to straight-line depreciation for tax purposes. The rm will not need to renovate the warehouses for another three years (from today). Given that the rm's marginal tax rate is 35% and required return is 11%, what is the present value of the remaining depreciation tax shields on the leasehold improvement? Ignore the halfyear rule, and round your answer to the nearest dollar. Select one: C a. $776,138 A b. $359,630 A c. $513,180 A d. $630,000 A e. $210,000 Question 6 A project requires an initial investment of $5 million and will yield operating cash ows of $1 .5 million per year for the next 10 years. At Not yet answered the end of 10 years, the project's assets can be divested for $250,000. The marginal tax rate is 40%, and the CCA rate is 30%. If the Marked out 0\" 00 required rate of return is 12%, what is the present value of the CCA tax shields? V Flag question Select one: A a. $1,352,040.82 A, b. $1,342,381.62 A c. $1,329,042.73 A d. $1,210,537.92 A e. $1,049,551.30 Question 7 Not yet answered Marked out of 1.00 '7 Flag question Question 8 Not yet answered Marked out of 1.00 '7 Flag question Kerfuffle Corporation is considering the purchase of a new computer system. The cost for the new system, net of set-up and delivery costs, will be $1.6 million. The new system will provide annual before-tax cost savings of $500,000 for the next ve years, The increased efciency of the new system will lower net working capital by $200,000 today. The CCA rate on the new system will be 30%. At the end of ve years, the system can be salvaged for $100,000. The rm's required rate of return is 15%, and its marginal tax rate is 35%, What is the NPV ofthis cost-cutting project? Select one: C a. -$224.011.86 A b. $22,882.55 m c. $15,174.10 A (1. $76,552.80 (7. e. $563,744.59 Lemington Enterprises is considering a project to replace its eet of 10 vehicles. The company makes its eet replacement decision every ve years. Its current eet of 10 vehicles was purchased ve years ago at $50,000 each, and can be sold for $8,000 each today. The new vehicles will cost $60,000 each and will bring cost savings of $100,000 per year. In ve years, the new vehicles can be sold for $9,000 each. If the eet is not replaced today, the current eet will have no salvage value in ve years' time. The CCA rate on these vehicles is 30%, and the company's marginal tax rate is 35%. What is the PV(CCATS) for this replacement project, assuming a required rate of return of 10%? Round your answer to the nearest dollar. Select one: C? a. $115,626 (3 b. $135,672 0 c. $130,295 (3 d. $13,567 (3 e. $148,711 Question 9 Monsoon Inc. is considering bidding on a government project. To do the project, the company must make an initial investment of $8 million to purchase the necessary equipment. The project will last for ve years, at the end of which the equipment can be salvaged for $500,000. The equipment has a CCA rate of 30%. The bidding process for the project requires the rm to submit a bid for a constant amount of $X before-tax, to be remitted by the government to the winning bidder each year. The rm's marginal tax rate is '7 Flag question 40%, and the required rate of return on similar projects is 18%, What is the minimum bid that the rm should submit for this project? Round your answer to the nearest dollar. Not yet answered Marked out of 1.00 Select one: C a. $8,000,000 O b. $3,191,717 O c. $1,915,030 O d. $3,308,198 C e. $5,988,626 Question 10 Given the following information for projects X and Y, which one should be chosen and why? Not yet answered ' Project X Project Y Marked out of 1.00 '7 Flag question ' Net present value $1,500,000 $2,000,000 ' Project life 5 years 8 years ' Required return 10% 10% Select one: A a. Choose Project X as it has a lower equivalent annual cost than Project Y. A b. Choose Project Y as it has a lower equivalent annual cost than Project X. A c. Choose Project Y as it has a higher equivalent annual benefit than Project X. A d. Choose Project X as it has a higher equivalent annual benet than Project Y. A e. Choose ProjectY as it has a higher net present value than Project X