• Ch. 11: Questions 1 & 7( Questions and Problems section)
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• Ch. 9: Questions 7 & 8( Questions and Problems section)
7. Calculating IRR [ LO5 ] A firm evaluates all of its projects by applying the IRR rule. If the required return is 14 percent, should the firm accept the following project?
8. Calculating NPV [ LO1 ] For the cash flows in the previous problem, suppose the firm uses the NPV decision rule. At a required return of 11 percent, should the firm accept this project? What if the required return is 24 percent?
• Ch. 10: Questions 3 & 13( Questions and Problems section)
3. Calculating Projected Net Income [ LO1 ] A proposed new investment has projected sales of $ 635,000. Variable costs are 44 percent of sales, and fixed costs are $ 193,000; depreciation is $ 54,000. Prepare a pro forma income statement assuming a tax rate of 35 percent. What is the projected net income?