1. Company A is planning to invest $60,000 in a project and the project will last 5-years. The company uses straight-line depreciation to a zero book value over the life of the project. The projected net income from the project is $2,500, $3,000, $3,500, $4,000, and $4,500 a year for the next five years, respectively. What is the average accounting rate of return?

Select one:

a. 11.67%

b. 12.50%

c. 13.56%

d. 6.10%

2. What is the IRR, if the 20-year project costs $400,000 and annual cash flows of $50,000 in years 1-10 and $35,000 in years 11-20. The company's required rate of return is 10%. Select one:

a. 8.53%

b. 10.53%

c. 9.60%

d. 12.53%