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1. Two new Internet site projects are proposed to a young start- up company. Project A will cost $250,000 to implement and is expected to have annual net cash flows of $75,000. Project B will cost $150,000 to implement and should generate annual net cash flows of $52,000. The company is very concerned about their cash flow. Using the payback period, which project is better, from a cash flow standpoint? 2. Sean, a new graduate at a telecommunications firm, faces the following problem his first day at the firm: What is the average rate of return for a project that costs $200,000 to implement and has an average annual profit of $30,000? 3. A four-year financial project has net cash flows of $20,000; $25,000; $30,000; and $50,000 in the next 4 years. It will cost $75,000 to implement the project. If the required rate of return is 0.2, conduct a discounted cash flow calculation to determine the NPV. 4. What would happen to the NPV of the above project if the inflation rate was expected to be 4 percent in each of the next 4 years? lem 4. shown in the following table: 5. Calculate the profitability index for Problem 3. For Prob- 6. A 4-year financial project has estimates of net cash flows Year Net Cash Flow 8. $20,000 25,000 30,000 35,000 4 It will cost $65,000 to implement the project, all of which must be invested at the beginning of the project. After the fourth year, the project will have no residual value. Using the most likely estimates of cash flows, conduct a discounted cash flow calculation assuming a 20 percent