A new project is being considered by investors in the area


1. Company A has an outstanding debt obligation (total of principle and interest due) to Company B of $250 (Assume this is Simple's only debt.). It is year end and the total cash flow of Simple from all sources is $325. The contingent payoff to the debt and equity holders of Compnay A is:

$250; $75

$250; $325

$75; $250

$325; $250

none of the other responses are reasonable

2. A new project is being considered by investors in the area. An outlay of $40,000 is required for equipment and an additional net working capital investment of $1000 is required. What is the total cost at time zero of accepting this project?

40,000

41,000

30,000

31,000

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Financial Management: A new project is being considered by investors in the area
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