QUESTION 1 Tyrell Corporation is considering a project with the following cash flows (in millions of dollars): Year Cash flows -$200 $100 $150 $200 -$100 HOT234 0 1 If the required return is 12%, what is the MIRR of the project? 16.45% 18.36% 20.34% 22.49% 26.86%

4. Fer Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? The WACC is 9%. Cash flow from project -$1,000 $400 $100 $800 Year 0 123

24 Matterhorn Mountain Gear is evaluating two projects with the following cash flows: Project X Project Y -$ 320,000 -$ 300,100 145,800 137, 150 163,300 154,350 128,400 120, 100 Year 0 1 2 3 What interest rate will make the NPV for the projects equal?

Y8 For the given cash flows, suppose the firm uses the NPV decision rule. Year Cash Flow 0 −$ 149,000 1 67,000 2 72,000 3 56,000 At a required return of 8 percent, what is the NPV of the project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. At a required return of 21 percent, what is the NPV of the project? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.

Question 24 The Flour Baker is considering a project with the following cash flows. Should this project be accepted based on its internal rate of return if the required return is 5 percent? Year Cash Flows 0 -$200,000 1 40,000 2 50,000 3 60,000 4 70,000 Group of answer choices Yes, because the project’s IRR is higher than the required rate Yes, because the project’s IRR is lower than the required rate No, because the project’s IRR is higher than the required rate No, because the project’s IRR is lower than the required rate You are indifferent

Question 1 Davidsons Incorporated is using Payback Period and Net Present Value (NPV) methods for investment decision making for small projects. The cut-off period will remain at 3 years. The net after tax cash flows of the projects are as follows: Cash Flows Initial Cost Year 1 Year 2 Year 3 Required: Project 1 £11,000 £5,000 £5,000 £5,000 Project 2 £20,000 £7,000 £5,500 £4,000 Project 3 £8,000 b) Explain the uses, limitations, and merits of the Payback Period compared to Net Present Value in investment appraisal. £3,000 £3,500 £4,000 a) Calculate the NPV of each project at 9% discount rate. Given the above four projects' cash flows and using a 9% discount rate, which projects that would have been accepted under Payback Period will now be rejected under Net Present Value? Project 4 £19,000 £11,000 £12,000 £0

Suppose a project has the following cash flows. What is the NPV if the cost of the project is $105,000 and the required return is 9.75%? Year Cash Flow $28.000 32,000 3 36,000 4 39,000 O$6,000 O $20,678 $1,193 $27,335 O $30,000 Page 16 of 30

#20 IRR You are offered to participate in a project that produces the following cash flows: C0- $5,000; C1-$4,000; C2 -$11,000 The interval rate of return is 13.6%. If the opportunity cost of capital is 12% , would you accept the offer?

Moving to another question will save this response. Question 5 XYZ is evaluating a project that would last for 3 years. The project's cost of capital is 17.20 percent, its NPV is $43,100.00 and the expected cash flows are presented in the table. What is 27 Years from today 0 1 2 3 Expected Cash Flow (in $) -53,600 71,700 -13,000 X O An amount equal to or greater than $69,384.00 but less than $75,459.00 O An amount equal to or greater than $43,100.00 but less than $52,436.00 O An amount equal to or greater than $52,436.00 but less than $63,115.00 O An amount equal to or greater than $63,115.00 but less than $69,384.00 O An amount less than $43,100.00 or an amount greater than $75,459.00

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