1. Consider an investment that costs $100,000 and has a cash inflow of $25,000 every year for 5 years. The required return is 9% and required payback is 4 years.

• What is the payback period?
• What is the discounted payback period?
• What is the NPV?
• What is the IRR?
• Should we accept the project?

2.What decision rule should be the primary decision method?

3.When is the IRR rule unreliable?