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1. A proposed project has an initial cost of $69,500 and is expected to produce cash...

1.

A proposed project has an initial cost of $69,500 and is expected to produce cash inflows of $32,200, $50,500, and $43,000 over the next 3 years, respectively. What is the net present value of this project at a discount rate of 15.8 percent?

$23,657.30

$21,763.60

$24,050.28

$24,933.59

2.

A project has an initial cost of $19,000 and cash inflows of $4,200, $4,600, $11,600, and $5,750 over the next 4 years, respectively. What is the payback period?

4.22 years

2.88 years

3.22 years

1.88 years

3.

A project has an initial cash outflow of $1,010 and cash inflows of $290 per year for 4 years. What is the discounted payback period at a discount rate of 9.2 percent?

Never

3.80 years

3.49 years

2.87 years

4.

A project has an initial cost of $56,700 and is expected to produce cash inflows of $19,700, $27,800, and $45,100 over the next 3 years, respectively. What is the project’s internal rate of return?

26.56 percent

17.17 percent

19.23 percent

24.94 percent

5.

Nelson’s Industrial Supply is considering a project that has projected cash inflows of $5,800 a year for 3 years. The initial cost of the project is $15,000 and the required return is 13.00 percent. Should this project be accepted based on the profitability index criterion? Why or why not?

no; because the PI is .91

no; because the PI is 1.51

yes; because the PI is 1.51

yes; because the PI is .91

Please answer all the questions. Thank you.

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