1. 20 years ago, you invested some funds that have grown to $2,500,000 if your investment has had an 8% return per year. (10 points) a. What was the initial amount invested? b. How much of the interest comes from compounding? 2. Consider the following cash flow. Assume that the discount rate is 15% (20 points) a) Obtain NPV. Interpret the result. b) Obtain payback. Interpret the result. c) Obtain discounted payback. Interpret the result. d) Obtain IRR. Interpret the result. 3. Consider the following cash flow. (10 points) Find the missing cash flow (year 5 ) such that the NPV is $400,000 with a discount rate of 12% 4. Consider the following cash flow. (20 points) a) What is the IRR for this project? b) Using the IRR, would you invest in this project if the required rate of return is 7% ? 5. Compare these two projects. (15 points) Which one is a better investment opportunity