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1. Assume that the upfront investment cost to purchase and set up a new project for the Gabe Packing Corporation is $1,100,000. If the project generates cash inflows of $250,000 at the end of the next 4 years, and if the cost of capital to finance this project is 15%, then what is the project's Net Present Value?

a. $386,255

b. $850,000

c. $25,000

d. (100,000)

e. None of the answers provided is correct.

2. If the Allie Cat, Inc. catfood company is expecting the economy to negatively affect their earnings, one positive move that can be made is to increase the level of operating leverage to increase the likelihood of positive earnings.

a. True

b. False

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92768862

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