Our firm is investing in its production capacity. The expansion will require a $685,000 investment in new property, plant, and equipment. The expansion will increase sales, which will necessitate an investment of $20,000 and $30,000 in new inventory and accounts receivable, respectively. Expanded sales will require more materials from our suppliers, which will increase our accounts payable by $30,000. What is the investment’s initial cost?

Country Breads uses specialized ovens to bake its bread. One oven costs $396,000 and lasts about 12 years before it needs to be replaced. The annual operating cash outflow per oven is $44,000. What is the equivalent annual cost, or EAC, of an oven if the required rate of return is 10 percent?

A project that costs $18,400 today will generate cash flows of $3,500 per year for seven years. What is the project’s payback period?

A company purchased an asset for $2,950,000 that will be used in a 3-year project. The asset is in the 3-year MACRS class. The depreciation percentage each year is 33.33 percent, 44.45 percent, and 14.81 percent, respectively. What is the book value of the equipment at the end of the project?

Country Breads uses specialized ovens to bake its bread. One oven costs $294,000 and lasts about 10 years before it needs to be replaced. The annual operating cash outflow per oven is $40,000. What is the equivalent annual cost, or EAC, of an oven if the required rate of return is 14 percent?

Today, most colleges and universities desire presidents with distinguished records of scholarly publications and lots of experience in academic leadership. But given that women were missing from the campus for so long, the number of very highly qualified female applicants is low. This is an example of

Canescent Industrial is evaluating a  project with the following cash flows: Year Cash Flow 0 -[CF0x],000 1 -[CF1x],000 2 [CF2x],000 3 [CF3x],000 4 [CF4x],000 5 -[CF5x],000 Canescent’s discount and reinvestment rates are both [rx] percent. Using the combination approach, what is the  modified IRR of the project? (Enter your answer as a percentage, round to the nearest hundred of a percent. So, your answer should look like “XX.XX percent”, but don’t enter “percent” or “%” ).

Blinding Light Co. has a project available with the following cash flows: Year Cash Flow 0 -$11,900 1 $6,500 2 $6,200 3 $6,300 4 $6,300 5 $5,800 What is the project’s IRR?

Our firm is investing in its production capacity. The expansion will require a $730,000 investment in new property, plant, and equipment. The expansion will increase sales, which will necessitate an investment of $25,000 and $40,000 in new inventory and accounts receivable, respectively. Expanded sales will require more materials from our suppliers, which will increase our accounts payable by $30,000. What is the investment’s initial cost?

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $392,000 and expenses by $276,000. The project will require $185,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 9-year life of the project. The company has a marginal tax rate of 40 percent. What is the depreciation tax shield?