Haydens Appliance Industries, Inc. has a project that will require and investment of $1,100,000. That project provides cash flows of $400,000, $525,000, and $600,000 in years one, two, and three respectively. If the firm has a cost of capital of 16% and uses the IRR approach to accepting or rejecting projects, what is the IRR of the project and should it be accepted?

16.00%

12.00%

17.00%

21.00%

None of the answers provided is correct

Amelias Artwork, Inc., a manufacturer of artist paints and products is planning to value a project. The project will require an initial investment of $1,250,000 and will generate cash flows of $250,000 in year 1, $312,500 in year 2, $375,000 in year 3, $437,500 in year 4, and $475,000 in year 5. Amelia has financed the firm with 40% debt and 60% equity. The cost of debt before tax is 5.19%, the cost of equity is 18.75%, and the tax rate is 40%. Determine the firms weighted average cost of capital (WACC).

13.33%

12.50%

18.75%

23.94%

None of the answers provided is correct.