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Equates the present value of future cash flows

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Reference no: EM131929213

1. The most commonly used measure of what an investment generates, which is the compound rate that equates the present value of future cash flows with the initial investment is _______.

a. operating cash flow (OCF)

b. internal rate of return (IRR)

c. return on assets (ROA)

d. free cash flow to equity (FCFE)

2. Papa Roach Exterminators, Inc., has sales of $664,000, costs of $345,000, depreciation expense of $37,000, interest expense of $23,000, and a tax rate of 40 percent. If the firm paid out $73,000 in cash dividends. What is the addition to retained earnings?

$119,400

$142,400

$74,160

$105,400

$82,400

Reference no: EM131929213

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