1. A manufacturing firm pays $36,000 to purchase a piece of capital equipment. The cash flows from the machine are $5,000 a year for the first four years, $4,000 a year for the next six years, and $2,000 a year for the next ten years. Find the net present value of purchasing this equipment assuming a discount rate of 8%.

a. ($0.13)

b. $368.58

c. $3,476.65

d. $35,999.87

e. $36,368.58

2. A firm pays $13,000 to purchase a piece of capital equipment. The cash flows from the machine are $5,000 a year for the first four years, $4,000 a year for the next two years. Find the modified IRR for purchasing this equipment assuming a reinvestment rate of 8%.

MIRR = _____%