FIN 419 Expect Success/uophelp.com FIN 419 Expect Success/uophelp.com | Page 4

6) NPV Calculate the net present value (NPV) for a 30-year project
with an initial investment of $ 0 and a cash inflow of $2,000 per year.
Assume that the firm has an opportunity cost of 17%. Comment on
the acceptability of the project.

7) Scenario Analysis Automated Food Distribution Corp. (AFDC)
produces vending machines and places them in public buildings. The
company has obtained permission to place one of its machine in a
local library. The company makes two types of machines. One
distributes soft drinks, and the other distributes snack foods. AFDC
expects both machines to provide benefits over a 8-year period, and
each has a required investment of $2,990. The firm uses a 9.8% cost
of capital. Management has constructed the following table of
estimates of annual cash inflows for pessimistic., most likely, and
optimistic results.

8) Degree of operating leverage Grey Products has fixed operating
costs of $382,000, varaiable operating costs of $15.61 per unit, and
selling price of $62.91 per unit.
9) Finding

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FIN 419 Final Exam Guide
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