Calculating NPV. For the cash flows in the previous problem, suppose the firm uses the NPV decision rule. At a required return of 10 percent, should the firm accept this project? What if the required return was 21 percent?

Calculating Payback. What is the payback period for the following set of cash flows?
Year CashFlow
0 1 2 3 4
ô°„$4,500 1,300 2,400 1,100 800

Relevant Cash Flows.Winnebagel Corp. currently sells 28,000 motor homes per year at $73,000 each and 7,000 luxury motor coaches per year at $115,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 23,000 of these campers per year at $19,000 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 2,600 units per year and reduce the sales of its motor coaches by 850 units per year. What is the amount to use as the annual sales figure when evaluating this project? Why

Calculating Projected Net Income. A proposed new investment has projected sales of $825,000. Variable costs are 55 percent of sales, and fixed costs are $187,150; depreciation is $91,000. Prepare a pro forma income statement assuming a tax rate of 35 percent. What is the projected net income?