1.What is the IRR of a project that requires an initial investment of $100,000 and produces a cash flow of $60,000 in one year, and $35,000 in three years? The appropriate discount rate is 8%.

A.0.95%

B.-2.89%

C.-16.66%

D.8%

E.-3.67%

2. You will depreciate a $200,000 initial investment for a project using 3-year MACRS depreciation schedule. Assume a marginal tax rate of 30%, an average tax rate of 20%, and a discount rate of 10%, and the project has positive net cash flows for five years. What is the present value of the depreciation tax shield?

The three-year MACRS schedule is:

33.33% depreciation in year 1

44.45% depreciation in year 2

14.81% depreciation in year 3

7.41% depreciation in year 4

calculate