Calculate and show the working out for thee questions. Please justify the answers because you should prove all the answers.

1. Consider the projects below: (15 points) Project 1 2 3 0 1 2 3 ($200,000) $50,000 $75,000 $125,000 ($250,000 $675,000 ($225,000) ($250,000) $500,000 ($300,000) ($200,000) ($100,000) L Estimate the IRR for each project (12 points), what project should you choose if cost of capital is 7% (3 points)? 4. Assume a . Your company is considering a new project at a cost of $12 million. b. The project may begin today or in exactly one year. e. You expect the project to generate $1,500,000 in free cash flow the first year if you begin the project today. a Free cash flow is expected to grow at a rate of 3% per year. e. The risk-free rate is 4%. t. The appropriate cost of capital for this investment is 11%. (20 points) .) What is the NPV of the project today? b) What is S* (the current value of the project without the "dividend" that will be missed) is? (hint: S*=S- PV(dividend)) What is the present value of the cost to begin the project in one year (PV(k)) is 4)To compute option value, if d1=1.4868, what is N(d1)