in onder to calculate the NPV in a Rif the diont rabe is statsd in nominal tevrns, then in wwwwwwmes, the pryect equires that A cash Aows be estimatt in nominal terms R cash fAows be estimahed in real terms 2 cash lows he estimated ignoring inflation & Two munalty exchusive ve projects have the following positive NPVs and project lives. Project NPV Life Project A $5,000 3 years Project B $6,500 5 years If the cost of capital were I15 percent, which project would you accept? A. Project A, because it has higher EAC B. Project B, because it has higher EAC C. Project A, because its NPV can be carned more quickly D. Project B, because it has higher NPV 9. If the cash fnows for project A are Co 1,000: C-+600;C -+400; and C +1,500, calculate the payback period A. One year B. Two years C. Three years D. Cannot be determined 10. Suppose that a project has a depreciable investment of $600,000 and falls under the following MACRS year 5 class depreciation schedule: year 1: 20 percent; year 2:32 percent year 3: 19.2 percent; year 4: 11.5 percent; year S: 11.5 percent, and year 6:5.8 percent. Calculate depreciation for year 2 A. $120,000 B. $192,000 C. $96,000 D. $115,200