Reference no: EM13858194

A. Bulls Corp. is considering additional production facilities and expects inventory to increase by $5 million, accounts receivable by $6 million, and accounts payable by $2.5 million. If other working capital accounts stay the same, what amount of added net working capital should be considered as part of the initial investment in this project?

8.5 Million
13.5 Million
11 Million
3.5 Million

B. If you bought a car with a 7 year loan that requires monthly payments. The amount borrowed is $49,999. The monthly payment is $650. What is the annual percentage interest rate (APR) on this loan?

21.13%
3.23%
0.21%
2.52%

C. Wendy has a 10-year mortgage loan. She borrowed $58,000 and this amortized loan has monthly payments. The annual interest rate is 3.20%. How much of her first month's payment goes toward interest?

$410.76
$154.67
$185.60
$565.42

D. Shelby Inc. sells a piece of equipment it owns today for $36,000. This equipment has been fully depreciated, using MACRS rules and had an original cost of $136,000. The company's tax rate is 40%. What is the after-tax cash inflow to the firm from the disposal of this asset?

$21,600
$14,400
$100,000
$78,400

E.Brody has just bought a boat by taking an unconventional 10 year, $72,500 mortgage from the bank. The interest rate is 6.45%. The mortgage is to be paid off by payments made every year starting one year from today. How much does he have to pay every year to repay the mortgage?

$821.38
$9,451.86
$7,250.00
$10,061.51

F. Answer the present value of $28 invested every month if the appropriate annual rate is 1.5% discounted monthly and you invest the money for 9 years with the first payment made one month from now.

$253.26
$3,235.46
$7,452.98
$2,827.11

G. Vegas. Co. is considering replacing extrusion equipment on its production line. The old equipment can be sold for $325,000 and has a book value of $130,000. If it has a 35% tax rate, what is the total incremental cash flow related to selling the old equipment?

$279,500
$256,750
$16,250
$113,750

H. What is the future value in your pension fund if you invest $12,000 per year for 20 years, earning a 10% annual rate of return? You make your first $12,000 payment today.

$688,065
$590,784
$687,300
$756,030

I. You have just won the lottery and have been promised an annual payment of $120,000 every year forever starting one year from today. If the annual interest rate is 9.0%, what is the present value of the winnings?

$4,569,885
$2,666,667
$1,333,333
$1,654,234

J. CrowelyInc has the opportunity to invest in a project that will pay back $4.568 million at the end of each year for the next 8 years, beginning one year from now. The initial investment required today is $2.476 million. If the project's required rate of return is 12.6%, what is the net present value?

$19.748 Million
$17.548 Million
$25.870 Million
$14.152 Million

K. My manager at Base Inc wants me to estimate the IRR for a proposed project. The project requires an initial investment of $7.8 million and has expected cash inflows of $2 million at the end of each year for 7 years. What is the IRR?

17.20%
16.88%
13.89%
98.00%

L. Delli has been told by its investment bankers that it would have to pay 14% interest to successfully sell new bonds. The company has bonds outstanding, issued 6 years ago, on which the company is paying 18% annual interest. The company's tax rate is 39%. What is its after-tax cost of debt if it decides to borrow new funds?

5.46%
8.54%
1.56%
7.91%

M. An annual dividend of $4.00 was just paid by Cup finance. The required return on Smart Consulting's stock is 11.25%. If dividends are expected to grow annually at 2.55% at what price should Cup Financing's stock be selling according to the discounted dividend model?

$36.46
$35.56
$47.15
$45.98

N.I will be investing $15,000 at the end of each year for the next 25 years for retirement. At the end of this 25 year time period I want to have accumulated $2 million. What annual rate of return would I have to earn on my investments to reach your target?

12.00%
11.33%
13.33%
7.69%

O.If the future value of $15,000 invested today is $75,000 in fifteen years, what is the underlying interest rate?

11.3%
8.7%
14.4%
9.4%

P. Steve Wynn plans to buy an ATV for $3,500 after eight years. If the annual interest rate he could earn is 6.0%, compounded every three months, how much money should he set aside today for the purchase?

$3,364
$2,173
$998
$2,098

Q. If the foreign currency/dollar exchange rate for the Mexican Peso is 22.35 peso/$, what does a peso cost in terms of US currency?

$0.947
$0.0591
$0.0947
$0.0447

R.What is the unit sales breakeven sales point for a business selling dresses at $75 per unit, with a variable cost per unit of $25 and total fixed costs of $10 million.

133,333 units
200,000 units
4,000 units
400,000 Units

S. There is a linear break-even graph for Holden Corporation. This company sells one product at a price of $225/unit. Its fixed costs are $2.5 Million. Its variable costs are $45/unit. What is the slope of the total costs line on this linear break-even graph?

0.20
225.0
5.0
45.00

T. If the yen/$ exchange rate is 120 and the peso/$ rate is 20, what is the yen/peso cross rate?

6 Yen/peso
120 yen/peso
2,400 yen/peso
0.17 yen/peso