90% debt and 10% equity because engineering firms are not worthy.

50% debt and 50% equity because engineering firms have high margins.

70% debt and 30% equity because engineering services are always needed.

10% debt and 90% equity due to the need to ensure repayment of debt obligations.

75% debt and 25% equity because interest on borrowed funds is taxable.

The NPV calculated when the discount rate is 12%

The period taken to produce a 5% return on an investment

The NPV calculated at the company’s weighted average cost of capital

The discount rate when NPV = 0

The project return rate a project must achieve before management will approve

Cashflow equal profit after tax

Cashflow equals net capital investment + revenue less fixed and variable cash operating costs less tax

Cashflow equals net capital investment + revenue less tax plus depreciation

Cashflow equals revenue less fixed and variable operating costs less tax

9.6%

6.4%

10.3%

11.0%

Cannot be determined

The interest rate Banks lend money to the company at

The rate of return shareholders expect from a project

The interest rate premium charged to a project’s cashflow to cover project and sovereign risk

The rate used in a NPV calculation

The % discount applied to project cashflows by management

$400,000

$100,000

$316,987

$348,685

$250,000

$110.25

$90.70

$110.00

$210.00

NPV = C_0 + \frac{C_1}{1+R} + \frac{C_2}{(1+R)^2} + \frac{C_3}{(1+R)^3} + ... + \frac{C_n}{(1+R)^n}

Where:

C_i is the after tax cashflow in Year i

R is the discount rate 

n is the number of years of cashflow

NPV = \sum^n_0 C_i

Where:

C_i is the after tax cashflow in Year i

n is the number of years of cashflow

NPV = \sum^n_0 \frac{C_i}{n!}

Where:

C_i is the after tax cashflow in Year i

n! is factorial of the number of years of cashflow, n! = 1 * 2 * 3 * ... * n

NPV = \sum^n_0 P_i

Where:

P_i is the after-tax profit in Year i

n is the number of years of profit

NPV = I - \sum^n_0 C_i

Where:

I is the initial investment

C_i is the after tax cashflow in Year i

n is the number of years of cashflow

Straight line depreciation amortizes the capital cost of an asset over its expected life

Depreciation is a non-cash expense

Depreciation varies annually depending upon the market value of the asset

Accounting and tax depreciation rates and calculation methodologies are often different

Tax depreciation reduces taxable income

164,000

164,250

162,250

163,000

Cannot be determined