1. Consider the following information regarding Cruz Electronics: 2018 2019 2020 EBIT $2000 $2500 $2800 Capital Expenditures $500 $500 $500 Changes in Working capital $40 $(10) $(20) Depreciation $50 $60 $100 Assume a 21% tax rate and that after 2020 the EBIT growth rate will be 2% annually; depreciation will equal capital expenditures, and that net working capital will not change. Also assume a discount rate of 12%. What is the NPV of Cruz Electronics total free cash flow for the period 2018 through 2020?
a. $3,925 b. $3,182 c. $3,137 d. $4,731 e. $3,509
2. The Generic 501(c)(3) Fund had revenue from contributions = $500,000, administrative expense = $125,000 program service expenses = $360,000 paid interest of $10,000 and had an increase in net assets = $5,000. They have cash = $30,000 accounts receivable = $20,000 inventory = $50,000 net fixed assets = $100,000 accounts payable = $22,000 long-term debt = $88,000 and net assets = $90,000.
Return on Assets is __________.
250%
15%
5%
2.5%