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A project has an initial requirement of $310,000 for fixed assets and $62,000 for net working capital. The fixed assets will be depreciated to a zero book value over the 3-year life of the project and have an estimated salvage value of $160,000. All of the net working capital will be recouped at the end of the project. The annual operating cash flow is $345,000 and the discount rate is 18 percent. What is the project's net present value if the tax rate is 34 percent?
A: $403,618.02
B: $414,141.41
C: $446,047.36
D: $478,122.21
E: $480,130.81
If market interest rates rise: How can investors reduce the risk associated with an investment portfolio without having to accept a lower expected return?
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You’ve observed the following returns on Doyscher Corporation’s stock over the past five years: –28.5 percent, 16.0 percent, 35.0 percent, 3.5 percent, and 22.5 percent. What was the average real risk-free rate over this time period? What was the ave..
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Compute the payback period and accounting rate of return for this equipment. (Record answers as percents, rounded to one decimal.)
Total revenues and net income for 2011 for Lake Corporation is $3,500,000 and $280,000 respectively. Lake Corporation has had 400,000 common shares of stock outstanding for all of 2011. The selling price of smith lake corporation common stock on Dece..
You have been offered the opportunity to invest in a project that will pay $2,726 per year at the end of years one through three and $5,219 per year at the end of years four and five. These cash flows will be placed in a saving account that pays 9.49..
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