1. Two 3-year mutually exclusive projects have the following cash flows: Project A: -1000, 750, 500, 300 Project B: -2500, 1500, 1000, 1000. Find the crossover rate.

2. An investment costs $100,000 and has a cash inflow of $25,000 a year for five years. What is the payback?

If the required payback period is 3 years, do you take the project?

3. Project ACC costs $52,125, its expected net cash inflows are $11,000 per year for 8 years, and its WACC is 11%. What is the project's MIRR?

A project costs $114,600 this year and will generate cash of $35,900; $50,800; and $45,000 over the next three years. The discount rate is 7%. What is the projects MIRR?

4. You can buy a BMW 7 Series for $75,000 and plan to replace it in 10 years.

Its annual maintenance cost is $5,000. Or, you can buy a Kia K900 for $50,000 and plan to replace it in 8 years.

Its annual maintenance cost is $4,000.

Your discount rate is your financing rate of 3% (annual).

Which car should you buy?