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What was the growth rate in tuition over the 30-year period 



1.	The capital budgeting director of Sparrow Corporation is evaluating a project that costs $200,000, is expected to last for 10 years and produces after-tax cash flows, including depreciation, of $44,503 per year.  If the firm- WACC is 14% and its tax rate is 40%, what is the project- IRR?
2.	Maxvill Motors has annual sales of $15,000.  Its variable costs equal 60% of its sales, and its fixed costs equal $1,000.  If the company- sales increase 10%, what will be the percentage increase in the company- earnings before interest and taxes (EBIT)?
3.	In 1958 the average tuition for one year at an Ivy League school was $1,800.  Thirty years later, in 1988, the average cost was $13,700. What was the growth rate in tuition over the 30-year period ?
4.	Cleveland Corporation has 100,000 shares of common stock outstanding, its net income is $750,000, and its P/E is 8.  What is the company- stock price?
5.	S. Claus & Co. is planning a zero coupon bond issue that has a par value of $1,000 and matures in 2 years.  The bonds will be sold today at a price of $826.45.  If the firm- marginal tax rate is 40%, what is the annual after-tax cost of debt to the company on this issue?



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