2. Year 3 $540 Consider the following cash flows for a new business investment. Year 0 Year 1 Year 2 Project cash flows $1,500 $560 $758 (a) Calculate the NPV and payback period assuming a 15% discount rate. (b) What does it mean for the project to have an IRR of 11.56%? (c) Sketch the NPV profile. (Explain the NPV when the discount rate is zero). 3. A company is considering investing in one of two projects. The projects, known as Ashworth and Blake, each cost $8,500 today and have the following cash flows. Year Project Ashworth Project Blake 1 $0 $3,750 2 $0 $3,750 3 $0 $3,750 4 $3,750 5 $0 $3,750 6 $37,500 $3,750 $0 (a) If the required return on both projects is 11.5%, what is the Pl and the NPV for each project? (b) What is the payback period for each project? Is the payback period a sensible method to evaluate a project like Ashworth