Bruno’s Lunch Counter is expanding and expects operating cas…

Bruno’s Lunch Counter is expanding and expects operating cash flows of $24,300 a year for 4 years as a result. This expansion requires $48,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $3,000 of net working capital throughout the life of the project, which will be fully recovered at the end. What is the net present value of this expansion project at a required rate of return of 15 percent?

Mountain Frost is considering a new project with an initial…

Mountain Frost is considering a new project with an initial cost of $277,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $22,600,$24,100, $27,200, and $15,200, respectively. What is the average accounting return?

Alt’s is contemplating the purchase of a new $163,000 comput…

Alt’s is contemplating the purchase of a new $163,000 computer-based order entry system. The system will be depreciated straight-line to zero over the system’s five-year life. The system will be worthless at the end of five years. The company will save $40,750 before taxes per year in order processing costs and will reduce its net working capital by $16,000 immediately. The net working capital will return to its original level when the project ends. The tax rate is 21 percent. What is the internal rate of return for this project?