1. Datta Computer Systems is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC (and even negative), in which case it will be rejected.

Year	0	1	2	3
Cash flows	-$1,050	$450	$470	$490

	a.	15.58%
	b.	18.15%
	c.	13.98%
	d.	16.07%
	e.	12.69%

2. Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows.

	a.	A projects IRR is the discount rate that causes the PV of the inflows to equal the projects cost.
	b.	If a projects IRR is positive, then its NPV must also be positive.
	c.	If a projects IRR is smaller than the WACC, then its NPV will be positive.
	d.	A projects regular IRR is found by compounding the cash inflows at the WACC to find the present value (PV), then discounting to find the IRR.
	e.	A projects regular IRR is found by compounding the initial cost at the WACC to find the terminal value (TV), then discounting the TV at the WACC.

3. A limited partnership investment costs $58,000 and does not pay anything to the investor for the first two years, but then expects to pay $28,000 at the end of Year 3, $29,000 at the end of Year 4, and $58,000 at the end of Year 5. Assuming that the partnership actually pays those cash flows, what would be the net present value of this investment if the interest rate was 9.7%?