1. Rons Restaurants is considering a project with the following expected free cash flows:

Year Projected Cash Flow

0 -$15000

1 9000

2 7000

3 9000

4 10000

If the projects appropriate discount rate is 12 percent, what is the projects NPV, IRR, and PI? Should Rons do the project? Why or why not?

2.

1. Spring Island Productions uses the modified internal rate of return (MIRR). The firm has a required rate of return of 9 percent. The project will cost $32,000 and generate the following cash flows

YEAR CASH FLOW

1 -------------$12,000

2---------------- $15,000

3.-------------- $14,200

-------------------$13,700

Calculate the modified internal rate of return. Is the project acceptable? Why or Why not? **Show all of your individual calculations**

PLEASE DONT USE EXCEL, SHOW WORK