Please show work on how you come up with the answers.

9. Jamie is analyzing two mutually exclusive projects of similar size and has prepared the following data. Both projects have 5 year lives.

Project A Project B

Net Present Value $15,090 $14,693

Payback Period 2.76 years 2.51 years

Required Return 8.3% 8.0%

Jamie has been asked for her best recommendation given this information. Her recommendation should be to accept:

a. Project A and reject project B based on their net present values

b. Project B because it has the shortest payback period.

c. Both projects as they both have positive net present values.

d. Project B and reject project A based on their required returns.

e. Neither project.

13. A certain project has an Average Accounting Return of .75 and incomes of 10,000, 50,000 and 30,000. What is the amount of the initial investment?

a. $30,000

b. $90,000

c. $40,000

d. $80,000

e. $20,000

16. Disposable Clothing Company has a degree of operating leverage of 2.5. The predicted sales level of 120,000 units next year may be way off. Sales may be only 110,400 units. If operating cash flow is expected to be $3,500.000 at the higher level, what would you expect OCF to be at the lower sales level?

a. $2,800,000

b. $9,600

c. $600,000

d. $4,200,000

e. $3,509,600

19. What is the present value of a project with the following cash flows and a required return of 12 percent?

Year Cash Flow

0 -$28,435

1 +$12,450

2 +$19,630

3 +$2,750

a. +$204.36

b. -$287.39

c. -$177.62

d. +$177.62

e. +$287.39