Hasty Drums, Inc. is considering two independent projects and is using the internal rate of return technique to make a choice. Project X requires an initial investment of $80,000; it will have cash inflows at the end of each of the next five years of $25,000. Project Z requires an initial investment of $120,000; it has cash inflows of $40,000 at the end of each of the next four years. What are the IRRs of each project?
Hasty Drums, Inc. is considering two independent projects and is using the
Ace Corporation is considering expanding its operations. If it expands, its current accounts are expected to change. Cash will increase by $20,000, accounts receivable by $40,000, and inventories by $60,000. At the same time accounts payable are going to increase by $50,000, accruals by $10,000, and long-term debt by $100,000. What will be the change in net working capital?
Zebra Corporation plans to sell an existing asset for $21,000. The asset cost $10,000 and it was being depreciated under MACRS using a five-year recovery period. Until now, it has been depreciated for four full years. The tax rate is 40 percent on both ordinary income and
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