Reference no: EM132681913

Medium Sized Retailer's balance sheet showed total current assets of $275,000, all of which were required in operations. Its current liabilities consisted of $62,500 of accounts payable, $40,000 of 7% short-term notes payable to the bank, and $19,750 of accrued wages and taxes. What was its net operating working capital? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

Liberty Services is now at the end of the final year of a project. The equipment originally cost $125,500, of which 75% has been depreciated. The firm can sell the used equipment today for $44,000, and its tax rate is 30%. What is the equipment's after-tax salvage value for use in capital budgeting analysis? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

Hogwarts Inc. is considering a project with the following cash flows:

Initial cash outlay = $2,500,000

After-tax net operating cash flows for years 1 to 4 = $779,000 per year

Additional after-tax terminal cash flow at the end of year 4 = $400,000

Compute the profitability index of this project if Hogwarts' WACC is 11%. Enter your answer rounded to two decimal places. For example, if your answer is 12.345 then enter as 12.35 in the answer box.