1.Payback Period, IRR, and Minimum Cash Flows The management of Mesquite Limited is currently evaluating the following investment proposal:

Initial investment	$270,000	--	--	--	--
Net operating
cash inflows	--	$100,000	$100,000	$100,000	$100,000

(b) Determine the proposal's internal rate of return. (Refer to Appendix 12B if you use the table approach.)

Answer

%

(c) Given the amount of the initial investment, determine the minimum annual net cash inflows required to obtain an internal rate of return of 8 percent. Round the answer to the nearest dollar.

$

2.Time Value of Money: Basics Using Table 12A.1 and Table 12A.2 of this chapter, determine the answers to each of the following independent situations.(Round answers to the nearest whole number.)

(d) An initial investment of $18,556 is to be returned in eight equal annual payments. Determine the amount of each payment if the interest rate is 14 percent. $ Answer (e) A proposed investment will provide cash flows of $30,000, $7,000, and $5,000 at the end of Years 1, 2, and 3, respectively. Using a discount rate of 16 percent, determine the present value of these cash flows. Year 1 $ Answer Year 2 $ Answer Year 3 $ Answer (f) Find the present value of an investment that will pay $5,000 at the end of Years 10, 11, and 12. Use a discount rate of 10 percent. $ Answer

3.Equal Annual Net Cash Inflows Apache Junction Company is evaluating a capital expenditure proposal that requires an initial investment of $44,190, has predicted cash inflows of $9,000 per year for 13 years, and has no salvage value. (a) Using a discount rate of 16 percent, determine the net present value of the investment proposal.(Round to the nearest whole number.) $Answer (b) Determine the proposal's internal rate of return. Answer% (c) What discount rate would produce a net present value of zero? Answer%