1a. Concord Company has assigned a discount rate of 14 percent to a new project that has an initial cost of $470,000 and cash flows of $130,000, $135,000, $140,000, $145,000, $150,000, and $155,000 for Years 1 to 6, respectively. What are the NPV and IRR of this project?

a. NPV=$63,267.42; IRR=17.26%

b. NPV=$76,782.07; IRR=17.26%

c. NPV=$76,782.07; IRR=18.42%

d. NPV=$63,267.42; IRR=18.42%

e. NPV=$76,782.07; IRR=19.60%

f. NPV=$63,267.42; IRR=19.60%

1b. Assume an equipment costs $367,000 and lasts ten years before it is replaced. The operating cost is $54,493 a year. Ignore taxes. What is the equivalent annual cost (EAC) if the required rate of return is 14 percent?

a. $152,813

b. $145,759

c. $138,246

d. $131,430

e. $124,852

f. $117,094