7. The project of G-Depress has the following information about the project:

Assume straight-line depreciation to zero. Initial investment= $20; life= 5 years; pretax sales= $20 per year; Total operating costs= 5; tax rate= 34%; No Salvage Value. Required NWC is $15. What is the NPV of this project, if discount rate is 11%?

1. $6.5
2. $8.2
3. $9.7
4. $13.7
5. $15.5

8. Given the numbers in the previous example, calculate the average accounting return. 29.04%

NI= 7.26

AVR assets= 25

AAR= 0.2904