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Dirk's Bakery has sales of $467,000 with costs of $233,000. Interest expense is $26,000 and depreciation...

Dirk's Bakery has sales of $467,000 with costs of $233,000. Interest expense is $26,000 and depreciation is $24,000. The tax rate is 21 percent. What is the net income?

Multiple Choice

  • $184,000

  • $134,300

  • $145,360

  • $142,200

  • $128,420

Your company will generate $47,000 in annual revenue each year for the next eight years from a new information database. If the appropriate interest rate is 4.4 percent, what is the present value of the savings? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Multiple Choice

  • $311,277.14

  • $276,352.11

  • $288,634.56

  • $242,899.04

  • $294,768.83

An investment costs $141,000 and has projected cash inflows of $77,100, $83,400, and -$18,100 for Years 1-3, respectively. If the required rate of return is 14.5 percent, should you accept the investment based solely on the internal rate of return rule? Why or why not?

Multiple Choice

  • No; The IRR exceeds the required return.

  • Yes; The IRR is less than the required rate of return.  

  • You should not apply the IRR in this case.

  • No; The IRR is less than the required rate of return.

  • Yes; The IRR exceeds the required rate of return.

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