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5. Use the following independent project's cash flows for questions (a) through (d): Year 0 1 2 3 Cash Flow -$21,500 $ 7,400 $ 9,800

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5. Use the following independent project's cash flows for questions (a) through (d): Year 0 1 2 3 Cash Flow -$21,500 $ 7,400 $ 9,800 $ 8,900 The marginal cost of capital is 11 percent. (a) Calculate the net present value of this project. What is the appropriate benchmark? Is the project acceptable? (3 pts) I (b) Calculate the IRR of this project. What is the appropriate benchmark? Is the project acceptable? (3 pts) (c) Calculate the profitability index for this project. What is the appropriate benchmark? Is the project acceptable? (2 pts) (d) Is there a consistency in your answers concerning the accept/reject decision using these criteria? Comment. (2 pts)

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