The capital budgeting director of Sparrow Corporation is evaluating a project which costs $200,000, is expected to last for 10 years and produce after-tax cash flows, including depreciation, of $44,503 per year
If the firm's cost of capital is 14% and its tax rate is 40%, what is the projected IRR?
A) 8%
B) 14%
C) 18%
D) -5%
E) 12%
C
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If a firm operates at less then full capacity then price _______________________ are not likely
Fill in the blank(s) with correct word
A cost that will not be affected by later decisions is termed a(n):
A) historical cost B) differential cost C) sunk cost D) replacement cost
Upon review of Roepers's statement of cash flows, the following was noted: Cash flows from operating activities $ 50,000 Cash flows from investing activities 80,000 Cash flows from financing activities (130,000) From this information, the most likely explanation is that Roeper is:
A) using cash from operations and selling long-term assets to pay back debt. B) using cash from operations and borrowing to purchase long-term assets. C) using its profits to expand growth. D) using cash from investors to provide for operations.
Which groups are significantly different from one another?
