1. Management expects a project (see question 48) to generate EBIT of $600,000 per year for 4 years. Depreciation expense is expected to be $225,000 per year and the corporation’s tax rate is 40%. The...

1. Management expects a project (see question 48) to generate EBIT of $600,000 per year for 4 years. Depreciation expense is expected to be $225,000 per year and the corporation’s tax rate is 40%. The project will require an increase in net working capital of $50,000 in year one and a decrease in net working capital of $25,000 in year four. The capital expenditure for the project will occur in year zero. What is the free cash flow for the project in year four?

2.. You are given the following information about BioWow Ethanol: common stockholders’ equity = $4 billion; price/earnings ratio = 3.5; common shares outstanding = 50 million; and price/book ratio = 2.0. BioWow is in the 40% tax bracket. Calculate the price of a share of BioWow stock.