Homework: HW Ch10 Question 9, P10-26 (similar to) HW Score: 0% 0 of 90 points Part 1 of 13 Points: 0 of 10 Save Integrative-Multiple IRRs Froogle Enterprises is evaluating an unusual investment project. What makes the project unusual is the stream of cash intow 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%, 6%, 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? 1 a. Why is it difficult to calculate the payback period for this project? (Select the best answer below) O A. The short life of the project makes it difficult to compute the payback period. OB. It is unreal for a project to have a cash inflow as an initial investment OC. The huge amount of cash outflow in year 3 makes the calculation difficult OD. The oscillating cash flows make it difficult to compute the payback period Year 0 1 Cash flow $190,000 - $874,000 $1,502,900 -- $1,144.940 $326,040 2. A W N - 3 4