An investment project provides cash flows of $7,000 per year for 10 years. If the initial cost is $20,000, what is the payback period?

The market risk premium equals the:

Altitude Ski has sales of $783,700, average accounts receivable of $56,700, and average accounts payable of $64,300. The cost of goods sold is equivalent to 42 percent of sales. How long does it take The Mountain Top Shoppe to pay its suppliers?

The Taco Truck has projected next year’s quarterly sales at $960, $890, $980, and $1,050 for Quarters 1 to 4, respectively. Accounts receivable at the beginning of the year are $212 and the collection period is 18 days. What is the amount of the accounts receivable balance at the end of Quarter 2? Assume a year has 360 days.

Which one of the following indicates an accept decision for an independent project with conventional cash flows?

A stock had returns of 14 percent, 13 percent, −10 percent, and 7 percent for the past four years. Which one of the following best describes the probability that this stock will lose no more than 10 percent in any one year?

What is the standard deviation of the returns on a stock given the following information? State of Economy Probability of State of Economy Rate of Return if State Occurs Boom .08 .171 Normal .70 .076 Recession .22 .017

On average, your firm sells $32,600 of items on credit each day. The average inventory period is 30 days and your operating cycle is 50 days. What is the average accounts receivable balance?

Satish Fiber works has an inventory period of 84.6 days, an accounts payable period of 43.2 days, and an accounts receivable period of 41.7 days. Management is considering an offer from their suppliers to pay within 10 days and receive a discount of 2 percent. If the new discount is taken, the accounts payable period is expected to decline by 30.4 days. What will be the new operating cycle given the change in the payables period?

Fitzgerald, Incorporated, is evaluating a project that will increase annual sales by $198,600 and annual cash costs by $94,500. The project will initially require $187,000 in fixed assets that will be depreciated straight-line to a zero book value over the four-year life of the project. No bonus depreciation will be taken. The applicable tax rate is 22 percent. What is the operating cash flow for this project?