Miller and Sons is evaluating a project with the following cash flows: The company uses a 10 percent interest rate on all of its projects. What is the MIRR of the project using the reinvestment approach? The discounting approach? The combination approach?

Year; Cash Flow

0; -72,000

1; 29,100

2; 20,600

3; 42,500

4; 24,300

5; -9,800

A. 18.54 percent; 17.29 percent; 14.61 percent

B. 13.96 percent; 14.38 percent; 14.61 percent

C. 18.54 percent; 17.29 percent; 13.67 percent

D. 13.96 percent; 17.85 percent; 13.67 percent

E. 18.54 percent; 18.23 percent; 18.61 percent

A project has an initial requirement of $311,700 for fixed assets and $47,600 for net working capital. The fixed assets will be depreciated to a zero book value over the four-year life of the project and will be worthless at the end of the project. All of the net working capital will be recouped after four years. The expected annual operating cash flow is $108,315. What is the project's internal rate of return if the tax rate is 34 percent?

A. 12.06 percent

B. 11.99 percent

C. 10.69 percent

D. 12.15 percent

E. 10.87 percent

Pappys Potato has come up with a new product, the Potato Pet. Pappys paid $120,000 for a marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $815,000 per year. The fixed costs associated with this will be $196,000 per year, and variable costs will amount to 20 percent of sales. The equipment necessary for production of the Potato Pet will cost $865,000 and will be depreciated in a straight-line manner for the 4 years of the product life. This is the only initial cost for the production. Pappys has a tax rate of 40 percent and a required return of 13 percent. Calculate NPV and IRR.