Please help me with my Corporate Finance Questions 3! Question 1. "Richard s Market has projected net income of $38,000 and taxes of $4,100 for the year. Which one of the following will increase this firm s operating cash flow?" a. increase in tax rates b. increase in the depreciation expense c. sales decrease d. decrease in interest expense Question 2. "Frank s is analyzing a 6-year project that requires $578,000 in equipment to start the project. This cost will be depreciated on a straight-line basis to a zero book value over the life of the project. At the end of the project, this equipment is expected to have an aftertax salvage value of $123,000. The projected annual sales are $729,000 and the combined annual fixed and variable costs are $598,000. The tax rate is 35 percent. The project will reduce the firm s inventory by $34,000 over the life of the project. What is the project s initial cash flow?" "a. -$544,000" "b. -$563,000" "c. -$578,000" "d.-$612,000" 10 points Question 3. Which one of the following terms refers to the possibility that errors in projected cash flows will cause managers to make incorrect decisions? a. erosion b. forecasting risk c. opportunity cost d. sunk cost Question 4. What do you know for certain about two mutually exclusive projects if their NPVs both plot exactly at the crossover point on an NPV profile graph? a. Both projects have a zero NPV. b. Neither project is acceptable. c. Both projects should be accepted. d. You are indifferent between the two projects. Question 5. "Ralson s is analyzing a project with projected cash flows of $48,000 in year 1, $52,000 in year 2, $58,000 in year 3, and $61,000 in year 4. What is the PI of the project if the required return is 13.75 percent and the initial cash outlay is $152,500?" a. 0.93 b. 0.96 c. 1.04 d. 1.07 10 points Question 6. Which one of the following projects should you accept? a. A project with an IRR of 11.6 percent and a required return of 11.5 percent. "b. A project with an NPV of -$3,091." c. A project with a PI of 0.87. d. A project with a payback period of 2.6 years and a required period of 2.5 years. Question 7. "You are considering two mutually exclusive projects. Project A has a net present value of $11,507 and an IRR of 12.28 percent. Project B has a net present value of $10,208 and an IRR of 13.64 percent. Which project(s) should be accepted?" a. project A only b. project B only c. both A and B d. neither A nor B Question 8. Adding which of the following to the analysis of a proposed project will increase the NPV of that project? a. option to expand b. option to wait c. option to abandon "d. options to expand, wait, and abandon" Question 9. Which one of the following has to occur if the NPV of an independent project is positive? a. The payback period will exceed the life of the project. b. The AAR will equal the IRR. c. The PI will be greater than 1.0. d. The IRR will be less than the required return. Question 10. The MIRR is designed specifically for which one of the following types of situations? a. mutually exclusive projects b. projects with unconventional cash flows c. projects with perpetual cash flows d. projects with differing initial costs