1) Total assets are $1000, fixed assets are $700, long-term debt is $250, and short-term debt is $300. What is the amount of net working capital? A $0 B. $50 C. $300 D. $650 E. $700Net working capital = $1000 – $700 – $300 = $0 3) Your parents are giving you $100 a month for four years while you are in college. At a 6% discount rate, what are these payments worth to you when you first start college? A. $3,797.40 B. $4,167.09 C. $4,198.79 D. $4,258.03 E. $4,279.32 .4) The great, great grandparents of one of your classmates sold their factory to the government 104 years ago for $150,000. If these proceeds had been invested at 6%, how much would this legacy be worth today? Assume annual compounding. A. $936,000.00 B. $1,086,000.00 C. $60,467,131.54 D. $60,617,131.54 E. $64,254,159.44 5) An investment project has the cash flow stream of $-3250, $80, $200, $75, and $90. The cost of capital is 12%. What is the discounted payback period? A. 1.24 years B. 1.85 years C. 2.24 years D. 2.85 years E. 3.05 years 6) An investment cost $12,000 with expected cash flows of $4,000 for 4 years. The discount rate is 15.2382%. The NPV is ______ and the IRR is ______ for the project. A. -$634.89; 12.60% B. $0; 15.2382% C. $4,000; 0% D. Can not answer without one or the other value as input. E. None of these. 7) Thornley Machines is considering a 3-year project with an initial cost of $618,000. The project will not directly produce any sales but will reduce operating costs by $265,000 a year. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated $60,000. The tax rate is 34%. The project will require $23,000 in extra inventory for spare parts and accessories. Should this project be implemented if Thornley’s requires a 9% rate of return? Why or why not? A. No; The NPV is -$2,646.00. B. Yes; The NPV is $27,354.00. C. Yes; The NPV is $32,593.78. D. Yes; The NPV is $43,106.54. E. Yes; The NPV is $196,884.40. 8) A project will produce operating cash flows of $45,000 a year for four years. During the life of the project, inventory will be lowered by $30,000 and accounts receivable will increase by $15,000. Accounts payable will decrease by $10,000. The project requires the purchase of equipment at an initial cost of $120,000. The equipment will be depreciated straight-line to a zero book value over the life of the project. The equipment will be salvaged at the end of the project creating a $25,000 after-tax cash flow. At the end of the project, net working capital will return to its normal level. What is the net present value of this project given a required return of 14%? A. $3,483.48 B. $16,117.05 C. $27,958.66 D. $32,037.86 E. $49,876.02 9) What are the arithmetic and geometric average returns for a stock with annual returns of 5%, 8%, -3%, and 16%? A. 6.5%; 6.28% B. 6.5%; 9.21% C. 9.3%; 6.28% D. 9.3%; 9.21% E. 10.25%; 8.31% 10) A year ago, you purchased 300 shares of IXC Technologies, Inc. stock at a price of $10.05 per share. The stock pays an annual dividend of $.10 per share. Today, you sold all of your shares for $29.32 per share. What is your total dollar return on this investment? A.