2a.

Year	Cash Flow
0	$7,400
1	3,000
2	3,500
3	3,400

Required:
(a)	What is the NPV at a discount rate of 0 percent?
	(Click to select) $2,375 $2,425 $2,500.00 $2,575 $2,625

(b)	What is the NPV at a discount rate of 11 percent?
	(Click to select) $648.31 $610.55 $660.9 $629.43 $597.96

(c)	What is the NPV at a discount rate of 24 percent?
	(Click to select) $-921.11 $-875.06 $-948.75 $-967.17 $-974.61

(d)	What is the NPV at a discount rate of 29 percent?
	(Click to select) $-1,317.98 $-1,345.72 $-1,456.71 $-1,428.97 $-1,387.35

2b.

Mahjong, Inc., has identified the following two mutually exclusive projects:

Year	Cash Flow (A)	Cash Flow (B)
0	$37,200	$37,200
1	19,570	7,060
2	15,070	13,560
3	12,570	20,050
4	9,570	24,050

Required:

(a)	What is the IRR for Project A?
	(Click to select) 23.01% 21.22% 23.46% 21.67% 22.34%

(b)	What is the IRR for Project B?
	(Click to select) 20.43% 22.59% 22.16% 21.51% 20.86%

(c)	If the required return is 12 percent, what is the NPV for Project A?
	(Click to select) $7,096.43 $7,535.39 $6,950.11 $7,681.71 $7,315.91

(d)	If the required return is 12 percent, what is the NPV for Project B?
	(Click to select) $9,184.85 $9,468.92 $9,752.99 $9,942.37 $8,995.47

(e)	At what discount rate would the company be indifferent between these two projects (i.e. what is the crossover rate)?
	(Click to select) 18.75% 20.3% 18.36% 19.91% 19.33%

2c.

Year	Cash Flow
0	$7,300
1	4,900
2	2,900
3	3,400

Required :

(a)	What is the profitability index for the cashflows if the relevant discount rate is 9 percent?
	(Click to select) $1.375 $1.349 $1.31 $1.244 $1.271

(b)	What is the profitability index for the cashflows if the relevant discount rate is 19 percent?
	(Click to select) $1.155 $1.087 $1.121 $1.177 $1.065

(c)	What is the profitability index for the cashflows if the relevant discount rate is 26 percent?
	(Click to select) 0.965 1.016 0.985 1.067 1.046