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1. Consider an asset expected to generate the following finite set of cash flows. 1 2 3 0 ---- $11500 4 |--- $1200 5 years

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1. Consider an asset expected to generate the following finite set of cash flows. 1 2 3 0 ---- $11500 4 |--- $1200 5 years -1 -$4800 $1500 $7500 $1200 As shown on the timeline, the cost of the asset is $11,500. Assume a required rate of return of 10% per year, compounded annually. A. Calculate the net present value (NPV) of this set of cash flows. B. Calculate the internal rate of return (IRR) of the set of cash flows. C. Based on the NPV, should the company invest in this asset? Why or why not? D. Based on the IRR, should the company invest in this asset? Why or why not

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