1. Explain briefly at least five Common Types of Cash Flows with an example (10 Marks)
2. Nokia, Inc., is considering a new five year expansion project that requires an initial fixed asset investment of $5.7 million. The fixed asset will be depreciated straight-line to zero over its five-year tax life, after which time it will be worthless. The project is estimated to generate $4,950,000 in annual sales, with costs of $1032,000. If the tax rate is 37 percent, what is the OCF for this project? suppose the project requires an initial investment in net working capital of $275,000, and the fixed asset will have a market value of $187,000 at the end of the project. The discount rate is 12.5% What is the NPV of this project? (10 Marks)
3. What is the primary purpose of computing the equivalent annual costs when comparing two machines? (5 Marks)