1. A project with an initial investment of $436,100 will generate equal annual cash flows over its 11-year life. The project has a required return of 7.8 percent. What is the minimum annual cash flow required to accept the project?
$60,495.89
$69,138.17
$55,659.65
$64,406.68
$57,578.95
2. A 4-year project has an annual operating cash flow of $53,500. At the beginning of the project, $4,450 in net working capital was required, which will be recovered at the end of the project. The firm also spent $22,800 on equipment to start the project. This equipment will have a book value of $4,820 at the end of the project, but can be sold for $5,790. The tax rate is 35 percent. What is the Year 4 cash flow?
$61,714
$54,501
$20,633
$64,080
$63,401