02 2020年二级课后题cfafrm网课公司金融.pdf

© CFA Ins ute. For candidate u nly. Not for distribution. Practice Problems 69 PRACTICE PROBLEMS 1 FITCO is considering the purcha f new equipment. The equipment costs $350,000, and an additional $110,000 is needed to install it. The equipment will be depreciated straight-line to zero over a five-year life. The equipment will generate additional annual revenues of $265,000, and it will h e annual cash operating expenses of $83,000. The equipment will be sold for $85,000 after five years. An inventory investment of $73,000 is required during the life of the investment. FITCO is in the 40 percent tax bracket and its cost of capital is 10 percent. What is the project NPV? A $52,122. B $64,090. C $97,449. 2 After estimating a project’s NPV, the analyst is advised that the fixed capital outlay will be revised upward by $100,000. The fixed capital outlay is depre- ciated straight-line over an eight-year life. The tax rate is 40 percent and the required rate of return is 10 percent. No changes in cash operating revenues, cash operating expenses, or salvage value are expected. What is the effect on the project NPV? A $100,000 decrease. B $73,325 decrease. C $59,988 decrease. 3 When assembling the cash flows to calculate an NPV or IRR, the project’s after- tax interest expenses should be subtracted from the cash flows for: A the IRR calculation, but not the NPV calculation. B both the NPV calculation and the IRR calculation. C neither the NPV calculation nor the IRR calculation. 4 Standard Corporation is investing $400,000 of fixed capital in a project that will be depreciated straight-line to zero over its ten-year life. Annua les are