1. Shawn borrowed $132,600 at 4.25 percent for 30 years to purchase a home. Payments are to be paid monthly. If all payments are paid as agreed, how much total interest will be paid? (Round the monthly payment to two decimal places when computing the total interest paid.)

$86,086.67

$102,231.60

$108,161.08

$78,400.30

$97,086.67

2. California Hideaways is considering a new project whose data are shown below. The equipment has a 4-year project life. This equipment falls into class 43 with a CCA rate of 30% and would have zero salvage value. No new working capital would be required. Revenues and cash operating costs are expected to be constant over the project’s 4-year life. What is the project’s NPV? (Hint: Cash flows are constant in Years 1 to 4.)

WACC 10.0%

Net investment cost $65,000

Sales Revenue, each year $60,000

Cash Operating costs $25,000

Tax Rate 35.0%

A. $19,417

B. $16,284

C. $28,499

D. $23,402