FIN 571 TUTOR Imagine Your Future /fin571tutor.com FIN 571 TUTOR Imagine Your Future /fin571tutor.co | Page 6

2,400 soufflés per year, with each costing $2.80 to make and priced at
$5.65. Assume that the discount rate is 16 percent and the tax rate is 35
percent.
What is the NPV of the project? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)
Should the company make the purchase?
44.A project costing $6,200 initially should produce cash inflows of $2,860
a year for three years. After the three years, the project will be shut down
and will be sold at the end of Year 4 for an
45. Down Under Boomerang, Inc., is considering a new three-year
expansion project that requires an initial fixed asset investment of $2.73
million. The fixed asset will be depreciated straight-line to zero over its
three-year tax life, after which it will be worthless. The project is
What is the project’s NPV? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
1.Financial managers should primarily strive to:
8.You invested in long-term corporate bonds and earned 6.1 percent.
During that same time period, large-company stocks returned 12.6 percent,
long-term government bonds returned 5.7 percent, U.S. Treasury bills
returned 4.2 percent, and inflation averaged 3.8 percent. What average risk
premium did you earn?
11.Which one of the following accounts is included in stockholders' equity?
18. Galaxy United, Inc.