Question: 1. You are given the following data for year 1: revenues -$100, Fixed Costs -$40, including Depreciation of $10; total variable costs -$50, tax rate
1. You are given the following data for year 1: revenues -$100, Fixed Costs -$40, including Depreciation of $10; total variable costs -$50, tax rate = 20%. Calculate the after-tax ash flow for the project for year 1.
- $17
- $13
- $7
- $10
2. Since monitoring is not perfect, compensation plans should primarily provide managers incentives to:
- Focus on work
- Work long hours
- Take action to make stockholders happy
- Maximize shareholder value
3. A firm with very positive prospects to raise new capital, the firm should avoid:
- Using retained earning dividends
- To not pay cash dividends
- New debt
- Selling stock
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