1. Project Water has an initial cost of $639,700 and projected cash flows of $288,000, $319,000, and $165,000 for Years 1 to 3, respectively. Project Aqua has an initial cost of $411,200 and projected cash flows of $186,000, $178,000, and $145,000 for Years 1 to 3, respectively. What is the incremental IRR of these two mutually exclusive projects?
8.67% 10.93% 8.77% 1.06% 2.335
2. A firm has a positive net worth and is operating its fixed assets at full capacity, if its dividend payout ratio is 100%, and the company wants to hold all financial ratios constant, then for any positive growth rate in sales, it will require external financing. Question 6 options:
a) True
b) False
3. Below are the simplified current and projected financial statements for Sonit Industries. All of Sonit's assets are operating assets and all of Sonit's current liabilities are operating liabilities. Sonit Industries financial statements Based on the projections shown above, what will results will Sonit have?
a) Financing deficit of $36
b) Financing surplus of $36
c) Financing surplus of $255
d) Financing deficit of $255