5. Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.

Time: 0 1 2 3 4 5 6

Cash flow $15,000 $2,800 $4,000 $3,200 $3,200 $3,000 $2,800

Use the MIRR decision rule to evaluate this project.(Do not round intermediate calculations and round your final answer to 2 decimal places.)

6. Compute the PI statistic for Project Z if the appropriate cost of capital is 6 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Project Z

Time: 0 1 2 3 4 5

Cash flow $-3,400 $750 $880 $1,050 $700 $500