1. A new electronic process monitor costs $857,000. This cost could be depreciated at 30 percent per year (Class 10). The monitor could actually be worthless in 5 years. The new monitor would save us $311,000 per year before taxes and operating costs. Show the cash flows for each years 0-5!a) If we require a 14 percent return, what is the NPV of the purchase? Assume a tax rate of 35 percent.b) In the previous question, suppose the new monitor also requires us to increase net working capital by $37,100 when we buy it. Further suppose that the monitor could actually be worth $116,000 in 5 years. What is the NPV?

A pure discount (or zero-coupon) government bond has a face value of $10,000 and a yield of 4.88 percent. If the current price of the bond is $6,800, what is the maturity of the bond? (Recall that the compounding interval for bonds is 6 months.) (Choose the closest round number in years.)

A mutual fund pays 3.6% APR compounded monthly. How much money should I deposit in the account today if I want the balance of the account to be $8,000 in 10 years? Round to the nearest cent. a) A= P= PMT= APR= n= Y= SOLUTION: Deposit =

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