Problem 1) Calculate the payback for a project that costs $1,000 and is expected to provide cash inflows of $400 per year for the next three years. If the required payback is 3 years, should the firm accept the project?
Problem 2) Calculate the net present value for a project that costs $1,000 and is expected to provide cash inflows of $400 per year for the next three years if the cost of capital is 10%. Should the firm accept the
Problem 3) Calculate the depreciation tax shield for an asset that costs $100,000 and is depreciated over 10 years using straight line depreciation if the firm's tax rate is 30%.