An investment project has the following cash flows. 2. 001 : Cash Flow Year 060 $300 1 $300 2 01 $300 3 4F $500 4 $500 21 bdl $500 6 Suppose the discount rate is 8%. (a) What is the value of the cash flows today? 2 00 14 (b) What is the value of the cash flows at year 6? (c) What is the value of the cash flows at year 3? 3E

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Consider another set of net cash flows:   Year Cash flow 0 1,000 1 1,000 2 0 3 1,500 4 2,000 5 3,500     What is the net present value of the stream if the opportunity cost of capital is 10 percent? a.  What is the value of the stream at the end of year 5 if the cash flows are invested in an account that pays 10 percent annually? 2. What cash flows today (time 0), in lieu of the 1,000 cash flow, would be needed to accumulate $10,000 at the end of year 5? (Assume that the cash flows for years 1 through 5 remain the same.)

What is Project A's Modified Internal Rate of Return with a WACC of 7.75%? YEAR 0 1 2 3 4 CASH FLOWS Project A -$1050 675 650 Project B -$1050 360 360 360 360