1A) What is the discount rate at which the following cash flows have a NPV of $0? Answer in %, rounding to 2 decimals. Year 0 cash flow = -149,000 Year 1 cash flow = 39,000 Year 2 cash flow = 30,000 Year 3 cash flow = 40,000 Year 4 cash flow = 30,000 Year 5 cash flow = 41,000 Year 6 cash flow = 37,000

1B) What is the discounted payback period on Versace's proposed investment in a new line of fashion clothes? The expected cash flows appear below. Note that year 0 and year 1 cash flows are negative. (Answer in years; round to 2 decimals) Year 0 cash flow = -95,000 Year 1 cash flow = -18,000 Year 2 cash flow = 50,000 Year 3 cash flow = 49,000 Year 4 cash flow = 54,000 Year 5 cash flow = 45,000 Year 6 cash flow = 46,000 Required rate of return = 14.00%

1C) US Robotics is evaluating a new product line. The CFO asks for an estimate of number of years to recover the initial investment, ignoring the time value of money. You realize that this is the payback period. The estimated cash flows from the new product line appear below. (Answer in years, round to 2 places) Year 0 cash flow = -82,000 Year 1 cash flow = -41,000 Year 2 cash flow = 24,000 Year 3 cash flow = 40,000 Year 4 cash flow = 22,000 Year 5 cash flow = 26,000 Year 6 cash flow = 36,000 Year 7 cash flow = 39,000

ANSWER EACH PART (A,B,C)