A project that costs $261,774.76 to install will provide annual cash flows of $64,000.00 for each of the next 8 years.

a.	Calculate the NPV if the discount rate is 7.50%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

NPV

$

b.	Is this project worth pursuing?
	multiple choice Yes No

c.	How high can the discount rate be before you would reject the project (i.e. What is the projects IRR)? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Discount rate

%

2.

Planned Obsolescence has a product that will be in vogue for three years, at which point the firm will close up shop and liquidate the assets. As a result, forecast dividends are DIV₁ = $9, DIV₂ = $18, and DIV₃ = $3. What is the stock price if the discount rate is 30.79%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Stock price

$