D Question 1 8 pts Your firm is considering a capital budgeting project. The required initial outlay is $100,000. The project s expected to have a useful life of four years. The projected cash flows are as follows: Year 1 - $25,000 Year 2 - $30,000 Year 3 - $35.000 Year 4 - $40,000 Calculate the Payback period for this project. 4.00 Years 3.00 Years Oo oo 325 Years 0 2.50 Years Question 2 10 pts Consider the same project as the previous problem with an initial outlay of $100.000 and annual cash flows as follows Year 1 - $25,000 Year 2 - $30,000 Year 3 - $35.000 Year 4 - $40,000 Calculate the Internal Rate of Return (IRR) for the project 10.23% 1117% 10.49% 9.7596 Consider the same project as the previous problem with an initial outlay of $100,000 and annual cash flows as follows: Year 1 - $25.000 Year 2. $30.000 Year 3 - $35.000 Year 4 - $40,000 If your firm required a return of 8.50% on such investments, calculate the Net Present Value (NPV) for the project 0 $4.689.89 0 $1,23742 O $2.816.92 $4414,64 Your firm is considering a new capital budgeting project. The equipment will cost $18,000,000. It will depreciated by the straight-line method over six years, and the useful life of the project is also estimated to be six years. You expect annual sales to be $12.750,000. Fixed Costs are estimated at $1,750,000 and variable costs should be 55% of sales. Your firm faces a 30% marginal tax rate. Estimate the annual operating cash flow the project will generate over its six-year life. 5691.250 O $4.915.250 $3,691 250 $3,780.125