A B D E F G 1) Cerritos Company can invest in each of three cheese-making projects: C1, C2, and C3. Each project requires an initial investment of $438,374 and would yield the following annual cash flows. 8 9 10 Year 1 $ 11 12 13 Year 2 Year 3 Totals c1 24,000 $ 216,000 336,000 576,000 $ C2 192,000 $ 192,000 192,000 576,000 $ C3 360,000 120,000 96,000 576,000 $ 15 16 Required 17 1. Assuming that the company requires a 12% return from its investments, use net present value to determine which projects, if any, should be acquired. 19 20 2. Using the answer from part 1, explain whether the actual, internal rate of return is higher or lower than 12% for project C2. 18 21 22 23 24 25 Check: 1) Net present value of C2 is $22,810 1-12 DO OS EX PR BYN In-class PVA Table FVA Table PV Table FV Table Read