Wellpoint Company is considering an investment project that will produce an operating cash flow of $415,200 a year for five years. The initial cash outlay for equipment will be $1,027,000. An aftertax salvage value of $82,160 for the equipment will be received at the end of the project. The project requires $154,050 of net working capital that will be fully recovered. What is the net present value of the project if the required rate of return is 14 percent?

A$388,174.80

B$367,045.29

C$353,609.37

D$376,320.20

E$345,631.90

1. Steelcase, Inc. has total assets of $1,575,000, long-term debt of $630,000, stockholders' equity of $819,000, and current liabilities of $126,000. The dividend payout ratio is 35 percent and the profit margin is 11 percent. Assume all assets and current liabilities change spontaneously with sales and the firm is currently operating at full capacity. What is the external financing need if the current sales of $2,100,000 are projected to increase by 15 percent?

A$44,678 B$52,437 C$60,375 D$67,550 E $72,140

1. At the beginning of the year, DST Systems had current assets of $490,000 and current liabilities of $435,000. At the end of the year, the current assets are $587,000 and the current liabilities are $550,000. What is the change in net working capital of the company?A$17,000 B$55,000 C$32,000 D-$18,000 E-$23,000

1. NorthWestern Corporation has net income of $1,395,000. The firm pays out 30 percent of the net income to its shareholders as dividends. During the year, the company sold $271,000 worth of common stock. What is the cash flow to stockholders?

A$156,000

B$152,000

C$147,500

D

$

$133,500

1. Allergan, Inc. is considering an investment project that generates a cash flow of $1,700,000 next year if the economy is favorable but generates only $700,000 if the economy is unfavorable. The probability of favorable economy is 65% and of unfavorable economy is 35%. The project will last only one year and be closed after that. The cost of investment is $1,385,000 and Allergan plans to finance the project with $500,000 of equity and $885,000 of debt. Assuming the discount rates of both equity and debt are 0%. What are the expected cash flows to Allergan's creditors and shareholders if the company invests in the project?
2. $820,250 to creditors and $529,750 to shareholders
3. $885,250 to creditors and $529,750 to shareholders
4. $825,250 to creditors and $547,750 to shareholders
5. $0 to creditors and $800,000 to shareholders
6. $800,000 to creditors and $0 to shareholders