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

a.Why is it difficult to calculate the payback period for this project?

b.Calculate the investment's net present value at each of the following discount rates: 0%, 5%, 10%, 15%, 20%, 25%, 30%, 35%.

c.What does your answer to part b tell you about this project's IRR?

d.Should Froogle invest in this project if its cost of capital is 5%? What if the cost of capital is 15%?

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

Year		Cash flow
0		$190,000
1		$874,000
2		$1,502,900
3		$1,144,940
4		$326,040