Toups Paddleboards has a 30-day collection period. Sales for the next calendar year are estimated at $1,950, $2,100, $2,650 and $3,200, respectively, by quarter, starting with the first quarter of the year. Given this information, which one of the following statements is correct? Assume a year has 360 days.

A project will produce cash inflows of $5,400 per year for 3 years with a final cash inflow of $2,400 in Year 4. The project’s initial cost is $13,400. What is the net present value if the required rate of return is 14.2 percent?

Lou Construction is looking at a new system with an installed cost of $411,500. This cost will be depreciated straight-line to zero over the project’s seven-year life, at the end of which the system is expected to be sold for $35,000 cash. No bonus depreciation will be taken. The system will save the firm $129,400 per year in pretax operating costs, and the system requires an initial investment in net working capital of $22,500. All of the net working capital will be recovered at the end of the project. The tax rate is 23 percent and the discount rate is 13.2 percent. What is the net present value of this project?

Tidewater Fishing has a current beta of 1.16. The market risk premium is 6.8 percent and the risk-free rate of return is 2.9 percent. By how much will the cost of equity increase if the company expands its operations such that the company beta rises to 1.18?

What is the standard deviation of the returns on a stock given the following information? State of Economy Probability of State of Economy Rate of Return if State Occurs Boom .08 .171 Normal .70 .076 Recession .22 .017

Harper Motors sells 39 cars per month at an average price of $24,920. The carrying cost per car is $158 and the fixed order cost is $694. How many orders should the company place per year?

Overland purchased $387,950 of fixed assets that are classified as three-year property for MACRS. The MACRS rates are .3333, .4445, .1481, and .0741 for Years 1 to 4, respectively. What is the amount of the depreciation expense in Year 3 assuming no bonus depreciation is taken?

In actual practice, managers most frequently use which two types of investment criteria?

Sawyer’s currently sells 70 units per month at a price of $412.50 per unit. The firm is considering switching to a 30 day credit policy with a credit sales price of $429.69 per unit and a cash price of $412.50. The monthly interest rate is 1.17 percent. What is the break-even default rate of the proposed switch?

Walker Systems has an issue of preferred stock outstanding with a stated annual dividend of $2.60 that just sold for $23.85 per share. What is the bank’s cost of preferred stock?