Ventana Windows is looking at a project that will require $80,000 in fixed assets and another $20,000 in net working capital. The project is expected to produce annual sales of $110,000 with associated costs of $70,000. The project has a life of 4 years. The company ignores bonus depreciation and instead uses straight-line depreciation to a zero book value over the life of the project. The tax rate is 21 percent. What is the annual operating cash flow for this project?

$35,8000

$40,000

$27,000

$43,200

$31,600

2.Teahnas announced that its next annual dividend will be $1.80 per share and all future dividends will increase by 4 percent annually. What is the maximum amount you should pay to purchase a share of this stock if you require a rate of return of 11 percent?

$16.36

$26.74

$25.71

$28.54

$17.02