71) The cost of capital for the firm is

A) 8%.

B) 6%.

C) 10%.

D) 12%.

72) Using the cost capital as the discount rate, the net present value of the project is

A) \$89,360.

B) \$108,480.

C) \$114,680.

D) \$228,180.

73) The approximate internal rate of return of the project is

A) 8%.

B) 12%.

C) 12.5%.

D) 14%.

74) Miller Manufacturing has acquired a new parcel van to transport packages from the airport to its sales offices for \$20,000.  The van is a class 10 item which has a capital cost allowance rate of 30%.  The company plans to use the van for five years and then sell it for an expected salvage value of \$4,000.  The capital cost allowance for the first year would be

A) \$3,000.

B) \$6,000.

C) \$5,100.

D) \$3,500.

75) The amount of the capital cost allowance for the second year for Mike Manufacturing would be

A) \$3,000.

B) \$6,000.

C) \$5,100.

D) \$3,500.

Use the following information regarding a production asset to answer the next question(s).

 Acquisition Costs \$25,000 Annual Cash Inflow from Operations 6,000 Annual Operating Costs 2,000 Expected Salvage Value 5,000 Cost of Capital 14% Capital Cost Allowance Rate 30% Tax Rate 40% Useful Life of Equipment 5 years

76) The capital cost allowance for the first year would be

A) \$3,750.

B) \$6,375.

C) \$7,500.

D) \$4,463.

77) The tax savings from the capital cost allowance in the second year would be

A) \$1,500.

B) \$2,550.

C) \$3,000.

D) \$2,000.

78) The annual after-tax cash inflow from operations would be

A) \$1,200.

B) \$2,400.

C) \$2,800.

D) \$3,600.

79) The annual after-tax operation costs would be

A) \$1,000.

B) \$1,200.

C) \$1,500.

D) \$2.000.

80) The present value of equipment salvage value at the end of the five years would be

A) \$4,000.

B) \$5,000,

C) \$2,076,

D) \$2,595,

81) The net present value of the project would be

A) \$12,595.

B) \$10,900.

C) \$11,162.

D) \$13,912.