As discussed in the chapter, abnormal earnings (AB) are AEI = Actual earningsr - Required or \"normal\" earnings, which may be expressed as AE, = NOPAT, (r x BV,_ 1) where NOPAT is the rm's net operating prot after taxes, r is the cost of equity capital, and BV,_l is the book value of equity at time t 1. Required: Solve the following problems: 1. IfNOPAT is $5,000, r = 15%, and BVH is $50,000, what is AB? 2. IfNOPAT is $25,000, r = 18%, and BVP1 is $125,000, what is AB? 3. Assume the rm in requirement 2 can increase N OPAT to $30,000 by instituting some cost-cutting measures. What is the new AB? 4. Assume the rm in requirement 2 can divest $25,000 of unproductive capital with NOPAT falling by only $2,000. What is the new AB? 5. Assume the rm in requirement 2 can add a new division at a cost of $40,000, which will increase N OPAT by $7,600 per year. Would adding the new division increase AB? 6. Assume the rm in requirement 1 can add a new division at a cost of $25,000, which will increase N OPAT by $3,500 per year. Would adding the new division increase AE