Question 7 (2 points) Cameron Industries is purchasing a new chemical vapor depo

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Question 7 (2 points) Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It will cost $6 million to buy the machine and $10,000 to have it delivered and installed. Building a clean room in the plant for the machine will cost an additional $3 million. The machine is expected to have a working life of six years. If straight-line depreciation is used, what are the yearly depreciation expenses in this case? Question 7 options: A) $1,000,000 B) $1,001,667 C) $1,500,000 D) $1,501,667 Save Question 8 (2 points) Bubba Ho-Tep Company reported net income of $300 million for the most recent fiscal year. The firm had depreciation expenses of $125 million and capital expenditures of $150 million. Although it had no interest expense, the firm did have an increase in net working capital of $20 million. What is Bubba Ho-Tep's free cash flow? Question 8 options: A) $170 million B) $255 million C) $150 million D) $5 million Save Question 9 (2 points) Jim owns a farm that he wants to sell. He learns that a highway will be built near the farm in the future, giving access to the farmland from a nearby city and thus making the land attractive to housing developers. Expecting the net present value (NPV) of the sale to be greater after the highway is built, he decides not to sell at this time. What real option is Jim taking? Question 9 options: A) option to delay B) option to expand C) option to abandon D) option to switch Save Question 10 (2 points) The EBIT breakeven point can be calculated using which of the following formulas? Question 10 options: A) (Units Sold

Explanation / Answer

B) $1,001,667 C) $150 million B) option to expand D) (Units Sold × Sale Price) + (Units Sold × Cost per unit) + SG&A - Depreciation = 0

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