Your company is expanding, and as a result expects additional operating cash flows of $30,000 a year for 4 years. This expansion requires $50,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires an additional $3,000 of net working capital throughout the life of the project; your company expects to recover this amount at the end of the project. What is the net present value of this expansion project at a 15% required rate of return?

a. $34,793

b. $34,365

c. $35, 649

e. $29, 416

f. cannot calculate NPV as no tax rate is given in the question

Determine the IRR of a project that costs $250,000 today and has annual cash flows of $30,000 each year over its 10 years' life.

a. 3.46%

b. 8.40%

c. 9.40%

e. 11.40%

f. 12.40%

g. 10.40%

$ 32, 410

Given the following information, how many days, on average, does it take the firm to pay back its suppliers?

Beginning inventory = $50,000 Ending inventory = $45,000 Beginning Accounts Receivable = $60,000 Ending Accounts Receivable = $66,000 Beginning Accounts Payable = $70,000 Ending Accounts Payable = $84,000 Sales = $1,000,000 % credit sales = 60% Cost of goods sold = $500,000

a. 62.5 days

b. 56.2 days

c. 46 days

e. 7.9 days

f. 76. 9 days

g. 6.5 days

Your company is looking at investing in a 4-year project that will create operating cash flows (OCFs) of $7,000 each year in the first 2 years, $8,000 in the third year, and $10,000 in the fourth year. The cost of this project is $25,000 and salvage value is zero, and the required return is 12%. What is the payback period on this project?

a) 2.5 years

b) 3.3 years

c) 2 years

d) it is not going to payback (takes more than 4 years)

e) 2.3 years

You have $100 now. How long will it take you to triple your money if you can invest it at 5% per annum?

a) 25.30 years

b) 23.45 years

c) 18.24 years

d) 12.70 years

e) 22.52 years

f) 30.83 years