1) What is the payback period for the following set of cash flows? Year Cash Flow 0 -7800 1 3100 2 3200 3 2200 4 1400?

5) What is the profitability index for the following set of cash flows? If the relevant discount rate is 10%? What if the discount rate is 15%? If it is 22%? Year Cash Flow 0 -29,000 1 16,900 2 13,600 3 8,300?

10) The Yurdone Corporation wants to set up a private Cemetery business. According to the CFO, business is looking up. As a result, the Cemetery project will provide a net cash flow of $164,000 for the firm during the first year, and cash flows are projected to grow at a rate of 4.7% per year forever. The project requires an initial investment $1,825,000.

10a) if the company requires a return of 12% on such undertakings, should the Cemetery business be started?

10b) The company is somewhat unsure about the assumption of a 4.7% growth rate in its cash flow. At what constant growth rate would the company just break even? If it still required a return of 12% on its investment?