Phoenix Company can invest in each of three cheese-making projects: C1, C2, and C3. Each project requires an initial investment of $282,000 and would yield the following annual cash flows. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

	C1				C2				C3
Year 1		$	30,000			$	114,000			$	198,000
Year 2			126,000				114,000				78,000
Year 3			186,000				114,000				66,000
Totals		$	342,000			$	342,000			$	342,000

1. Assume that the company requires a 9% return from its investments. Using net present value, determine which projects, if any, should be acquired.

Project C1
Initial Investment
Chart Values are Based on:
i =		%
Year	Cash Inflow	x	PV Factor	=	Present Value
1				=
2				=
3				=
Project C2
Initial Investment
Year	Cash Inflow	x	PV Factor	=	Present Value
1				=
2				=
3				=
Project C3
Initial Investment
Year	Cash Inflow	x	PV Factor	=	Present Value
1				=
2				=
3				=

2. Using the answer from part 1, is the internal rate of return higher or lower than 9% for Project C2?

Is the internal rate of return higher or lower than 9% for Project C2?