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28) ABC Corporation is concerned that the following project has some problem with IRR. How many discount rates produce a zero NPV for this project?

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28) ABC Corporation is concerned that the following project has some problem with IRR. How many discount rates produce a zero NPV for this project? A) One, a discount rate of 0% B) One, a discount rate of 36% C) One, a discount rate of 69% D) Two, discount rates of 0% and 36% E) Two, discount rates of 0% and 69% F) Two, discount rates of 36% and 69% G) None H) None of the above 29) ABC Corporation is considering an investment of $400 million with expected after-tax cash inflows of $102 million per year for seven years. The required rate of return is 10%. However, there is a possibility that the project will not get the required level of investments and ABC Corporation will have no other choice but to proceed with available funding ( 90% of the required investments). In this case, the after-tax cash inflows of $91,8 million per year are expected for seven years. As a result, on the NPV profile of a project: A) the vertical intercept shifts up and the horizontal intercept shifts left B) the vertical intercept shifts up and the horizontal intercept does not shift C) the vertical intercept shifts up and the horizontal intercept shifts right D) the vertical intercept shifts down and the horizontal intercept does not shift E) the vertical intercept shifts down and the horizontal intercept shifts left F) the vertical intercept shifts down and the horizontal intercept shifts right G) the vertical intercept does not shift and the horizontal intercept does not shift 30) Consider the two projects below. The cash flows as well as the NPV and IRR for the two projects are given. For both projects, the required rate of return is 10%. What discount rate would result in the same NPV for both projects? A) 19.87% B) 16.37% C) 15.02% D) 13.16% E) None of the above

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