A-C

Ch 12 - 2nd Day Homework: a) Ishi Company is considering three projects. The projects have the following expected cash flows. What is the internal rate of return for each project? Which project should Ishi select? Project A $100,000 Project B $125,000 Project C $150,000 Initial Capital Investment Cash Flow by Year $27,741 $27,741 $27,741 $27,741 $27,741 $50,264 $50,264 $50,264 $0 $0 $44,284 $44,284 $44,284 $44,284 $0 4 b) Choua borrowed $10,000 on April 1, 20X1 and agreed to pay it back April 1, 20X4 along with the accumulated interest (8% rate compounded annually). A) Calculate the amount of money Chou will need on 4/1/X4 by using simple multiplication (show your work). B) Use the TVM table and show your work. c) If Andrea invests $5,000 today, how much will it be worth at the end of 4 years if she can earn a 7% annual return? A) Calculate using the future value formula. B) Calculate using the TVM table. Show your work in both cases