Froogle enterprises is evaluating an unusual investment project. What makes the project unusual is the stream of cash inflows and outflows shown in table below

1 why is it difficult to calculate the payback period for this project

A) it is unreal for a project to have a cash inflow as an initial investment

B) the oscillating cash flows make it difficult to compute the payback period

C) the huge amount of cash outflow in year 3 makes the calculation difficult

D) the short life of the project makes it difficult to compute the payback period

2) if the discount rate is 0% the investment NPV is ..... Round to two decimal places

3) of the discount rate is 5%.......

4) if the discount rate is 10%....

5) if the discount rate is 15%....

6) if the discount rate is 20%.....

7) if the discount rate is 25%.....

8) if the discount rate is 30%.....

9) if the discount rate is 35%.....

10. What does your answer to the above percentages tell you about this projects IRR?

A) there is no IRR for such cash flows

B) there are infinite IRR for this project

C) there are multiple iRR for this project

D) there is only one IRR for this project

11) should the company invest in this project if its cost of capital is 5%? Yes or no

12) should the company invest in this project if it's cost of capital is 15%? Yes or no

13) in general, when faced with a project like this, how should a firm decide whether to invest in the project or reject it?

A) it is best to use the NPV method

B) it is best to use the IRR method

C) it is best to use the payback period method

D) none of the methods is suitable