Quad enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.18 million. the fixed asset qualifies for 100 percent bonus depreciation in the first year. the project is estimated to generate $1,730,000 in annual sales, with costs of $636,000. the project requires an initial investment in net working capital of $290,000, and the fixed asset will have a market value of $240,000 at the end of the project.

Comparative financial statements for weller corporation, a merchandising company, for the year ending december 31 appear below. the company did not issue any new common stock during the year. a total of 800,000 shares of common stock were outstanding. the interest rate on the bonds, which were sold at their face value, was 12%. the income tax rate was 40% and the dividend per share of common stock was $0.40 this year. the market value of the company's common stock at the end of the year was $18. all of the company's sales are on account. time interest earned ratio