1.Compute the IRR statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 10 percent.

TIME:012345

CASH FLOW:- 300- 200200200200250

2.Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below.The required rate of return of both projects for their risk class is 8 percent.

TIME:0123

Project A CF:$ - 10,000$ 30,000$ 40,000$10,000

Project B CF:$ - 40,000$ 50,000$ 80,000$56,850

Use the Profitability Index (PI) decision rule to evaluate these projects; what is the PI for each project, and which one(s) should it be accepted or rejected?