1. A capital budgeting project will cause EBIT to increase by $54719 per year. The annual depreciation expense is $42561. The firm's tax rate is 21%. At the end, the equipment will be sold for its salvage value of $53796; its book value will be $24837 at that time. The initial increase in net working capital of $15864 will be recaptured at the end of the project's life. What is the cash flow in the last year of the project's life, in $? Include both the annual FCF and the terminal CF.

2. What is the MIRR of a project that costs $696, generates free cash inflows of $211 at the end of each of the first 4 years and an outflow of 119 at the end of Year 5? The reinvestment rate is 7.43%. (Record your answer to the nearest 0.01%, drop the % symbol. E.g., if your answer is 10.7745%, record it as 10.77.)

3.

CrochetCo is considering an investment in a project which would require an initial outlay of $324886 and produce expected cash flows in years 1 through 5 of $88380 per year. You have determined that the current after-tax cost of the firm's capital (required rate of return) for each source of financing is as follows:

Source of Capital	Cost	Weight
Long-Term Debt	4%	51%
Preferred Stock	8%	16%
Common Stock	11%	33%

What is the net present value of this project?

4. Common equity investors of Adventure Outfitter Corp. require a 20.2% return. The flotation costs of selling the stock amount to 3.1% of the selling price. The dividends are expected to grow at the 6.1% annual rate forever. Find the cost of new equity for the company, in %, to the nearest 0.01% (drop the % symbol when recording the answer).

Note: Use the alternative formula for finding the cost of new equity (on the instructor's handout; the formula in the text is incorrect).

5. BN Unicorn Co. common stock has a beta of 1.6 and is expected to pay a $2.92 dividend over the next year. The dividend is expected to grow at the constant rate of 4% per year. The risk-free rate is 0.24% and the return on the market index is 9.26%. What is the cost of new equity to the firm, in %, if the flotation costs of issuing it are 6%? (Drop the % symbol.)