1a.

Cassidy Health Systems has estimated the following cash flows of dollars for a 3-year capital project with a cost of capital of 10%:

Year 0	$(100,000)
Year 1	60,000
Year 2	40,000
Year 3	30,000

The projects payback period to the nearest whole year is __________

The projects net present value (NPV) to the nearest whole cent is $ __________

The project's internal rate of return (IRR) in decimal form rounded to the nearest .001 is __________

1b.

A project has the following cash flows:

Year 0	$(160,000)
Year 1	1,000,000
Year 2	(1,000,000)

The projects internal rate of return (IRR) in decimal form rounded to the nearest .001 is __________

Group of answer choices

Cannot be determined from the information

.25

Both 0.250 and 4.000

4.0

1c

The following sensitivity information for Project A is provided:

	Net Present Value
Change from Base Case Level	Volume	Salvage Value
-30%	$(814,053)	$(57,215)
-20	(515,193)	(10,646)
-10	216,350	35,923
0	82,493	82,493
10	381,335	129,062
20	680,178	175,631
30	979,020	222,200

Which of the following 7 statements best describes the sensitivity information for Project A? Enter the number corresponding to your answer, e.g., 1, 2, 3, 4, 5, 6 or 7.

1. Project A is more sensitive to changes in volume
2. Project A's base net present value (NPV) is $82,493
3. Project A is more sensitive to changes in salvage value
4. Project A is equally sensitive to changes in volume and salvage value
5. Both 1 and 2 are true
6. Both 2 and 3 are true
7. Cannot be determined from the information