1) A project has an initial cash outflow of $39,800 and produces cash inflows of $18,304, $19,516, and $14,280 for years 1 through 3, respectively. What is the NPV at a discount rate of 11 percent?

$2,971.13

-$1,208.19

$1,311.16

$2,029.09

$7,675.95

2) You own some equipment that you purchased four years ago at a cost of $287,000. The equipment is five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, .0576, for years 1 to 6, respectively. You are considering selling the equipment today for $99,000. Which one of the following statements is correct if your tax rate is 35 percent?

A.The accumulated depreciation to date is $270,468.80.

B. The book value today is $49,406.40.

C The tax due on the sale is $17,357.76.

D The taxable amount on the sale is $49,593.60.

E The aftertax salvage value is $81,707.76.

3) A project produces annual net income of $18,200, $21,800, and $22,900 over its three-year life, respectively. The initial cost is $197,000, which is depreciated straight-line to a zero book value over three years. What is the average accounting rate of return if the required discount rate is 14.5 percent?

A 21.29 percent

B 18.98 percent

C 23.84 percent

E 16.67 percent

D 20.25 percent

4)

You just purchased some equipment that is classified as five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, and .0576 for Years 1 to 6, respectively. The equipment cost $218,000. What will the book value of this equipment be at the end of three years should you decide to resell the equipment at that point in time?

$62,784.00

$67,670.40

$58,467.20

$38,532.80

$42,336.67