1. An investment project is expected to generate earnings before taxes (EBT) of $30,000 per year. Annual depreciation from the project is $30,000 and the firm's tax rate is 40 percent. Determine the project's annual net cash flows.
$48,000
$66,000
$36,000
$52,000
2. A firm's price to earnings ratio is 8 and its market to book ratio is 2. If its earnings per share are $4.00, what is the book value per share?
a. $64.00
b. $32.00
c. $16.00
d. $ 8.00
3. Historically, the yield curve has generally been ____, which indicates that long-term interest rates usually have been ____ short-term interest rates. upward sloping, lower than
downward sloping, higher than
upward sloping, higher than
level, about equal to