Answer the following questions

36. The company considers investing in an asset that costs $10,150 and returns after-tax net cash flow of $1,700 semiannually for 2 years, followed by $2,800 per semi-annum for the following year. The company financing rate is 10.0%. According to the decision rule for the "internal rate of return", is this project a wise investment for the company? a. The annual IRR is 10.9% and the investment does not create wealth for the company. b. The annual IRR is 10.9% and the investment does create wealth for the company. c. The annual IRR is 9.5% and the investment does not create wealth for the company. d. The annual IRR is 12.5% and the investment does not create wealth for the company. e. The annual IRR is 9.5% and the investment does create wealth for the company. 37. Your company is looking at an investment that today costs $4,641 and returns after-tax cash flow exactly one year, two years, and three years from today, respectively, equal to $2,000, $2,500 and $2,900 . The company intends to finance the investment at a rate of 14.2% and to repay the loan (principal and interest) with the investment cash flows as they occur. How much wealth will the investment create? a. the capitalized value of wealth the project creates today is $974 b. the capitalized value of wealth the project creates today is $847 c. the capitalized value of wealth the project creates today is $737 d. the wealth created in the company at the time the loan finally is paid-off equals $847 e. the wealth created in the company at the time the loan finally is paid-off equals $737 39 Consider the following cash flows for two mutually exclusive investments: t=0 t=1 t=2 t=3 A ($670) $498 $309 $128 B ($890) $104 $303 $919 Which statement is true? a. if the financing rate is 16.7% then project B is the better of the two b. if the financing rate is 11.1% then projects A and B create the same amount of wealth c. if the financing rate is 8.3% then project A is the better of the two d. if the financing rate is 20.3% then project B is the better of the two e. if the financing rate is 24% then project A is the better of the two