Net Present Value of the following Cash Flows

Question 1
What is the net present value of the following cash flows? Assume an interest rate of 2.03%

    Year    CF
    0    -$12,387
    1    $7,180
    2    $5,224
    3    $9,399

Question 2
    Consider a taxable bond with a yield of 10.6% and a tax-exempt municipal bond with a yield of 4.4%. At what tax rate would you be indifferent between the two bonds?


Question 3

    In its most recent financial statements, ABC reported $55,004 of net income and $609,459 of retained earnings. The previous retained earnings were $621,318. How much in dividends was paid to shareholders during the year?

Question 4

    ABC Company earned $856,962 in taxable income for the year. How much tax does the company owe on this income?

 
Question 5

    ABC Company has a debt-equity ratio of 0.66. What is the debt ratio?

Question 6


    A project has the following cash flows. What is the internal rate of return?

    Year 0 1 2 3

    Cash flow -$121,000 68,150 $42,200 $39,100


    14.82%


    14.39%


    13.47%


    13.85%


    12.71%



Question 7

    Your firm has the following balance sheet statement items: total current liabilities of $325,000; total assets of $3,655,000; fixed and other assets of $1,770,000; and long-term debt of $200,000.

    What is the amount of the firm’s net working capital?


    $1,685,000


    $325,000


    $1,080,000


    $1,885,000


    $1,560,000



Question 8

    ABC Company offers a perpetuity which pays annual payments of $9,478. This contract sells for $276,415 today. What is the interest rate?

   
Question 9

    A firm has a return on equity of 33.9 percent, a net profit margin of 8.4 percent, and total equity of $733.9. What is the net income?


Question 10

    ABC Company lists total assets of $4,238, current liabilities of $271 , long-term debt of $903 , and 309 shares of common stock. If the market price per share is $60, what is the market-to-book ratio?

 
Question 11

    Suppose an investment offers to double your money in 30 years. What annual rate of return are you being offered if interest is compounded semi-annually?

Question 12


    Suppose you invest $49,200. If the interest rate is 12% compounded quarterly for the first 10 years and 12% compounded monthly for the next 5 years, what is the future value after 15 years?

Question 13

    ABC is reviewing a project that will cost $2,099.The project will produce cash flows $702 at the end of each year for the first two years and $707 at the end of each year for the next three years. What is the profitability index? Assume interest rate is 6%.

  
Question 14

    Debbie wants to have $64,459 in her bank account 4 years from now. The account will pay 0.9% interest per month. How much money does she need to put in her bank account at the end of each month to achieve this goal?

 
Question 15

    Calculate the NPV of a project that requires investment of 681 and provides the cashflows of 390, 318, 316, 364 in the next 4 years. The relevant discount rate is 14%. (All numbers are in dollars)

Question 16

    Find the payback period for a project that requires investment of $30 and returns $11 every years for 7 years.


Question 17


Calculate the project's IRR.

Year

   

0

   

1

   

2

   

3

   

4


Cash flows

   

−$1,050

   

$400

   

$400

   

$400

   

$400