Broadway Inc. is considering a new musical. The initial investment required is $880,000. Every year, the free cash flow from the project is expected to be $80,000, continuing forever (Hint: think about a perpetuity). a. What is the NPV of the project?
b. In fact, the annual cash flow of $80,000 is an expected value: there is a 50% chance that annual cash flow will be $180,000 and a 50% chance that it will be -$20,000. What is the expected NPV of the project if the company cannot abandon the project?
c. What is the true NPV of the project if the company can abandon the project after the first year?
d. What is the value of the option to abandon?

Which are the best examples of costs that should be considered when creating a project budget?

Do it! review 16-3 the assembly department for right pens has the following production data for the current month. beginning work in process units transferred out ending work in process 0 22,500 16,000 materials are entered at the beginning of the process. the ending work in process units are 70% complete as to conversion costs. compute the equivalent units of production for (a) materials and (b) conversion costs. materials conversion costs the equivalent units of production

John and daphne are saving for their daughter ellen's college education. ellen just turned 10 at (t = 0), and she will be entering college 8 years from now (at t = 8). college tuition and expenses at state u. are currently $14,500 a year, but they are expected to increase at a rate of 3.5% a year. ellen should graduate in 4 years--if she takes longer or wants to go to graduate school, she will be on her own. tuition and other costs will be due at the beginning of each school year (at t = 8, 9, 10, and 11).so far, john and daphne have accumulated $15,000 in their college savings account (at t = 0). their long-run financial plan is to add an additional $5,000 in each of the next 4 years (at t = 1, 2, 3, and 4). then they plan to make 3 equal annual contributions in each of the following years, t = 5, 6, and 7. they expect their investment account to earn 9%. how large must the annual payments at t = 5, 6, and 7 be to cover ellen's anticipated college costs? a. $1,965.21b. $2,068.64c. $2,177.51d. $2,292.12e. $2,412.76