Question: Lithium, Inc. is considering two mutually exclusive projects, A and B. Project A costs 595,000 and is expected to generate $65,000 in year one and
Lithium, Inc. is considering two mutually exclusive projects, A and B. Project A costs 595,000 and is expected to generate $65,000 in year one and $75,000 in year two. Project B costs $120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three, and $45,000 in year four. Lithium, Inc.'s required rate of return for these projects is 10%. The net present value for Project B is $58, 097. $66, 363. $74, 538. $112,000 Denver Systems has total assets of $1,000,000; common equity of $400,000; a gross profit of $800,000; total operating expenses of $620,000; interest expense of $20,000; income taxes of $74,000; and preferred dividends of $30,000. What is Denver Systems' return on equity? 75% 20.0% 21.5% 14.0% The present value (t = 0) of the following cash flow stream is $11, 958.07 when discounted at 12
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