(A) What is the internal rate of return on a project with the following cash flows:

(i) What is the projects internal rate of return? (ii) If your companys WACC of 12%, what value does this project represent? (iii) Assuming the project is minimally risky, should you invest? Why or why not?

(B) Your companys executive deems the project in (A) to be vital to company operations, but identifies an alternative that has the following cash flows. Using IRR, which of the two alternatives should you choose? Why?

(C) What are the simple and discounted payback periods for both of the alternative projects in (A) and (B)?

Cash Flow Cash Flow Year (000's) Ye 0 -S 200.0 11 Year (000's) $ 225.00 1 $ 400.0012225.00 13 $ 225.00 14 $ 225.00 4 $ 125.0015 $225.00 16 $ 225.00 17 $ 225.00 18 $ 225.00 19 $ 225.00 $ 225.00 20$ 225.00 $ 225.00 2 -$ 300.00 3 $ 100.00 $ 200.00 $ 225.00 $ 225.00 $ 225.00 10 | $ 225.0 21