A project that provides annual cash flows of $2,000 for nine years costs $10,000 today.

a. At a required return of 10%, what is the NPV of the project?

b. What is the NPV at a rate of 18%?

c. Discuss the relationship between NPV and required rate of return.

d. What can we say about the projects IRR, without actually calculating IRR? Choose from the list below: i. IRR is less than 10%. ii. IRR is greater than 10% but less than 18%. iii. IRR is greater than 18%.

e. How do we know this?