1. Top Shelf Industries is considering remodeling a building that it leases to a retail store. The remodeling costs are estimated at $500,000. If it proceeds with the remodeling, the tenant has agreed to pay an additional $120,000 a year in rent for the next 6 years. The discount rate is 4.9 percent. What is the net present value of the remodeling project to Top Shelf Industries? a. $108,146 b. $109,552 c. $110,461 d. $111,036 e. $112,864 2. What is the payback period for a project with the following cash flows? Year 0 1 2 3 4 Cash flow -$37,800 7,300 8,700 9,800 12,600 a. 3.54 years b. 3.61 years c. 3.73 years d. 3.88 years e. 3.95 years 3. A project has the following expected cash inflows for its four-year life: $2,300, $3,700, $4,500, $5,400. The profitability index is 1.401 and the discount rate is 6.2 percent. What is the initial cost of the project? a. $9,500 b. $9,600 c. $9,700 d. $9,800 e. $9,900 co