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1 A project with an initial cost of $54,400 is expected to provide annual cash flows of $15,300 over the 6-year life of the project. If the required return is 8.5 percent, what is the project's profitability index?

(A) 1.281

(B) 1.174

(C) 1.067

(D) .781

(E) 1.441

2 Power Manufacturing has equipment that it purchased 6 years ago for $2,700,000. The equipment was used for a project that was intended to last for 8 years. However, due to low demand, the project is being shut down. The equipment was depreciated using the straight-line method and can be sold for $430,000 today. The company's tax rate is 40 percent. What is the aftertax salvage value of the equipment?

(A) $430,000

(B) $602,000

(C) $332,000

(D) $479,000

(E) $528,000

3 POD has a project with the following cash flows:

Year	Cash Flows
0	$237,000
1	147,700
2	165,200
3	130,300

The required return is 8.1 percent. What is the profitability index for this project?

(A) 1.608

(B) 1.474

(C) 1.340

(D) .622

(E) .777

4 A company. has a project available with the following cash flows:

Year	Cash Flow
0	$34,790
1	12,720
2	14,740
3	20,010
4	11,300

If the required return for the project is 8.4 percent, what is the project's NPV?

(A) $15,293.38

(B) $13,381.71

(C) $23,980.00

(D) $12,266.56

(E) $5,197.79

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