1. Assume a project has normal cash flows. All else equal, which of the following statements is CORRECT?

	a.	The projects IRR is adversely affected by changes in the WACC.
	b.	The projects regular payback increases as the WACC declines.
	c.	The projects payback decreases as the WACC declines.
	d.	The projects NPV increases as the WACC declines.
	e.	The projects IRR increases as the WACC declines.

2. ABC is evaluating a capital project that would have an initial cost of $136,246. The financial analyst says that the Net Present Value (NPV) is 185,928. Given that information, what is the project's Profitability Index (PI)? 3. An investment promises cash flows in years 1, 2, and 3 of $33,000. In years 4 and 5, it will pay $59,000. If your required rate of return is 8.4 percent, what is that worth today?