1. Suppose the government imposes a tax on gasoline.

1. Would the revenue collected from this tax likely be greater in the first year after it is imposed or in the fifth year? Explain using a graph.
2. Would the deadweight loss from this tax be greater in the first year after it is imposed or in the fifth year? Explain using a graph.

The B/C ratio for a flood control project along the Swanee River was calculated to be 1.4. If the benefits were $600,000 per year and the maintenance costs were $200,000 per year, determine the initial cost of the project at an interest rate of 8% per year and a 50-year life. ( using spreadsheet)

A company is considering purchasing equipment costing $ 92,000. The equipment is expected to reduce costs from year 1 to 3 by $22,000, year 4 to 9 by $9,000,and in year 10 by $2,000. In year 10, the equipment can be sold at a salvage value of $15,000.

Calculate the internal rate of return​ (IRR) for this proposal.

1. What is the NPV of an equipment investment that costs $150,000 and returns $80,000 in the first year but then declines by 8%/year with the final cash flow coming in year 5? Also assume a discount rate of 9.4% and that the equipment can be sold for $45,000 at the end of the fifth year.
   1. $250,000
   2. $266,400
   3. $116,400
   4. $190,900
   5. $145,100

Suppose that the spot interest rate on a one-year zero-coupon bond is 2% and the spot interest rate on a two-year zero-coupon bond is 3.5%. Based on the pure expectations theory of the term structure of interest rates, what is the expected one-year interest rate starting in one year?

Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project's regular payback?

WACC: 10.00 %

Year 0 cash flows: -$1,000

Year 1 cash flows: $300

Year 2 cash flows: $500

Year 3 cash flows: $900

5. A project requires an investment of $100m in two years. It is expected to yield $25m after the third year, $25m after the fourth year; in the fifth year it will yield $7m, which will grow at 1% per year over the next five years. What is the project’s NPV at a cost of capital of 15%?

Firm C has Total Assets of $ 4,000,000. The firm’s Owners Equity at the beginning of the year was $2,800,000. The firm’s Net Income for the year was $ 400,000 and Dividends totaled $ 200,000… There was no Owners Investment for the year. Assuming that this information was for year ended 12/31/2007, please present the firm’s Statement of Owners Equity.