a. Consider the project with the following expected cash flows:

Year Cash Flow

-$ 400,000

$ 100,000

$ 120,000

$ 850,000

If the discount rate is 0%, what is the project's net present value?

If the discount rate is 2%, what is the project's net present value?

If the discount rate is 6%, what is the project's net present value?

If the discount rate is 11%, what is the project's net present value?

With a cost of capital of 5%, what is this project's modified internal rate of return?

b. Consider a project with the expected cash flows:

Year Cash flow

- $ 815,000

$ 141,000

$ 320,000

$ 440,000

What is this project's internal rate of return?

If the discount rate is 1%, what is this project's net present value?

If the discount rate is 4%, what is this project's net present value?

If the discount rate is 10%, what is this project's net present value?

If the discount rate is 18%, what is this project's net present value?