ou have 3 projects with the following cash flows:(Click on the following icon

in order to copy its contents into a spreadsheet.)

Year	0	1	2	3	4
Project 1	$150	$22	$40	$62	$79
Project 2	824	0	0	6,999	6,507
Project 3	19	39	58	82	245

a. For which of these projects is the IRR rule reliable?

b. Estimate the IRR for each project (to the nearest

1%).

c. What is the NPV of each project if the cost of capital is

5%?

20%?

50%?

a. For which of these projects is the IRR rule reliable?(Select from the drop-down menus.)

The IRR rule is reliable for

project 2

. Unless all of the

negative

cash flows of the project precede the

positive

ones, the IRR rule may give the wrong answer and should not be used. Furthermore, there may be multiple IRRs or the IRR may not exist.b. Estimate the IRR for each project (to the nearest

1%).

The IRR for project 1 is

1010%.

(Round to the nearest integer.)The IRR for project 2 is

enter your response here%.

(Round to the nearest integer.)The IRR for project 3 is

enter your response here%.

(Round to the nearest integer.)c. What is the NPV of each project if the cost of capital is

5%?

20%?

50%?

The NPV for project 1 for a cost of capital of

5%

is

$enter your response here.

(Round to the nearest cent.)The NPV for project 1 for a cost of capital of

20%

is

$enter your response here.

(Round to the nearest cent.)The NPV for project 1 for a cost of capital of

50%

is

$enter your response here.

(Round to the nearest cent.)The NPV for project 2 for a cost of capital of

5%

is

$enter your response here.

(Round to the nearest cent.)The NPV for project 2 for a cost of capital of

20%

is

enter your response here.

(Round to the nearest cent.)The NPV for project 2 for a cost of capital of

50%

is

$enter your response here.

(Round to the nearest cent.)The NPV for project 3 for a cost of capital of

5%

is

$enter your response here.

(Round to the nearest cent.)The NPV for project 3 for a cost of capital of

20%

is

$enter your response here.

(Round to the nearest cent.)The NPV for project 3 for a cost of capital of

50%

is

$enter your response here.

(Round to the nearest cent.)