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1. Polk Products is considering an investment project with the following cash flows: Year 0 = -$100,000 (initial costs); Year 1= $40,000; Year 2 =$90,000;

1. Polk Products is considering an investment project with the following cash flows: Year 0 = -$100,000 (initial costs); Year 1= $40,000; Year 2 =$90,000; and Year 3 = $30,000; and Year 4 = $60,000. The company has a 10% cost of capital, calculate the IRR for the project.

A. 10%

B. 20.8%

C. 30.1%

D. 40.7%

E. 50.3%

2. What is the project's discounted payback?

A.1.67 years

B.1.86 years

C.2.11 years

D.2.49 years

E.2.67 years

3. Calculate the NPV for the project.

A.$56,281

B.$67,476

C.$74,264

D.$78,496

E.$80,387

4.The Seattle Corp. is considering a new project. The firm has already paid $10,000 consulting fee for the feasibility analysis of the project. The project costs $230,000 to purchase buildings and equipment, $10,000 for shipping fee, and $10,000 for installation fee. Compute the depreciation basis of the project.

A. $260,000

B. $250,000

C. $240,000

D. $230,000

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