Question 1
Sarah wants to find the IRR (internal rate of return) of the below cash flows. Cn is the cash flow for the n-th period. What is the IRR? C0C1C2C3C4-100507010020 Question 2Ming wants to find the IRR of the below cash flows. Cn is the cash flow for the n-th period. What is the IRR? C0C1C2C3-1000500-5002000 Question 3Please use the information in Question 3 to answer Questions 3 through 5. Projects A and B are mutually exclusive. This means that choosing Project A prevents you from choosing Project B, and vice versa. The cost of capital is 7% per period. The cash flows of the projects are as follows. ProjectC0C1A-600782B-3046 What are the IRRs of Projects A and B, respectively? Please use a space to separate your answers. For example, if your answers are 5.1% for A and 7.3% for B, please enter the solution as 0.051 0.073. Question 4What are the NPVs of Projects A and B, respectively? Please use a space to separate your answers. For example, if your answers are 100 for A and -50 for B, please enter 100 -50. Question 5Which projects should you choose? Remember that the projects are mutually exclusive.Question 6Please use the information in Question 6 to answer Question 6 through 8. Vijay inherited 2,000 and wants to invest it. He can put it in the bank and receive 10% per period. His only alternative is a project with the below cash flows. C0C1C2C3-15008001000-100 Please calculate the IRR of the project. Question 7What is the NPV of the project? Question 8What is the most Vijay can consume in period 3? Question 9Please use the information in Question 9 for Questions 9 and 10. The Giraffe Company has a total of $150 million to invest in projects and the below investment opportunities are available to them. The firm’s cost of capital is 6%. Partial investment is not allowed – this means that you must invest in the whole project, if you choose to invest in the project at all. ProjectInvestment ($ millions)NPV ($ millions)IRRA1004015%B20515%C50-32%D301525%E1505525% The firm is unable to raise additional capital. Neha is a manager at the firm. Which projects should Neha invest in? Select all that apply.Question 10What is the maximum total NPV attainable from the chosen investments? Please enter in millions of dollars. For example, if the answer is $50 million, please enter 50.