# When determining the cash flow to assets, we start with net income, add back depreciation, add the change in net working capital, and subtract any…

1. When determining the cash flow to assets, we start with net income, add back depreciation, add the change in net working capital, and subtract any capital expenditures to net income. Why are these changes made to net income?

2.You have two friends who want to raise capital for a brewery. They’ve spent their savings develop- ing the idea, but they need a large amount of new capital to open a storefront and buy equipment. Banks have repeatedly denied their applications for large loans. They’ve approached wealthy family members and friends with very little luck. Why aren’t banks accepting their loan applications? If they’re willing to pay a high rate of return for funds, what’s another option you can suggest?

3.Assuming typical discount rates of less than 30 percent, rank the following from highest to lowest present value, and then briefly explain each one. (Hint: You shouldn’t have to make any calculations to determine the answer; think of the definitions of each.) O An ordinary annuity of five payments of \$50

An annuity due of five payments of \$50

A perpetuity of \$50

4.Assume that a project has an internal rate of return of 21 percent and a discount rate of 20 percent. Would you expect the NPV of the project to be positive or negative? Should the firm accept the project? Discuss the resulting NPV when the IRR is below the discount rate and when the IRR is equal to the discount rate.

5.Recall the three different investment criterion: the payback period, net present value (NPV), and internal rate or return (IRR). Compare and contrast these techniques. How do we know when to accept or reject an investment? Discuss some advantages and disadvantages (if applicable) to each.

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.