1. A 4-year project has an annual operating cash flow of $49,500. At the beginning of the project, $4,050 in net working capital was required, which will be recovered at the end of the project. The firm also spent $22,000 on equipment to start the project. This equipment will have a book value of $4,500 at the end of the project, but can be sold for $5,550. The tax rate is 40 percent. What is the Year 4 cash flow?
$58,680
$50,580
$56,880
$59,520
$21,852
2. Aashka Co. has some expenses and revenue in euros. If its expenses are more sensitive to exchange rate movements than revenue, it could reduce economic exposure by _______. If its revenues are more sensitive than expenses, it could reduce economic exposure by _______.
A) Decreasing foreign revenues; decreasing foreign expenses
B) Decreasing foreign revenues; increasing foreign expenses
C) Increasing foreign revenues; decreasing foreign revenues
D) Decreasing foreign expenses; increasing foreign revenues