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Please help me with these simple financial questions. Please see attached file. Module 9 Practice Set -NPV,IRR, Payback and PI, Problems with IRR and PI,

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Please help me with these simple financial questions. Please see attached file.

image text in transcribed Module 9 Practice Set -NPV,IRR, Payback and PI, Problems with IRR and PI, Real Options 1. For Buy Coastal, Inc. compute payback for the following projects. Year 0 1 2 3 4 Pay- Cash Flow Cash Flow $40,000 18,000 ? ? 2. For Projects A and B, compute the IRR. Year IRR 0 1 2 3 Cash Flow Cash Flow ? ? 3. A project that provides annual cash flows of $28,500 for nine years costs $138,000 today. What is the IRR? 4. Mahjong, Inc. has identified the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow Cash Flow 7,000 ? ? 5. Light Sweet Petroleum, Inc. wants you to compute the NPV for the following cash flows using a 12 percent required return: Year Cash 0 1 2 ? 6. What is the profitability index for the following set of cash flows if the relevant discount rate is 10 percent? Year PI Cash Flow 0 1 2 3 $14,000 ? 7 6 5 7. Consider the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow Cash Flow 40,000 12,000 ? If you require a return of 15 percent, which project should you choose? Module 9 Practice Set -NPV,IRR, Payback and PI, Problems with IRR and PI, Real Options 1. For Buy Coastal, Inc. compute payback for the following projects. Year 0 1 2 3 4 Pay- Cash Flow Cash Flow $40,000 18,000 ? ? 2. For Projects A and B, compute the IRR. Year IRR 0 1 2 3 Cash Flow Cash Flow ? ? 3. A project that provides annual cash flows of $28,500 for nine years costs $138,000 today. What is the IRR? 4. Mahjong, Inc. has identified the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow Cash Flow 7,000 ? ? 5. Light Sweet Petroleum, Inc. wants you to compute the NPV for the following cash flows using a 12 percent required return: Year Cash 0 1 2 ? 6. What is the profitability index for the following set of cash flows if the relevant discount rate is 10 percent? Year PI Cash Flow 0 1 2 3 $14,000 ? 7 6 5 7. Consider the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow Cash Flow 40,000 12,000 ? If you require a return of 15 percent, which project should you choose? Module 9 Practice Set -NPV,IRR, Payback and PI, Problems with IRR and PI, Real Options 1. For Buy Coastal, Inc. compute payback for the following projects. Year 0 1 2 3 4 Pay- Cash Flow Cash Flow $40,000 18,000 ? ? 2. For Projects A and B, compute the IRR. Year IRR 0 1 2 3 Cash Flow Cash Flow ? ? 3. A project that provides annual cash flows of $28,500 for nine years costs $138,000 today. What is the IRR? 4. Mahjong, Inc. has identified the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow Cash Flow 7,000 ? ? 5. Light Sweet Petroleum, Inc. wants you to compute the NPV for the following cash flows using a 12 percent required return: Year Cash 0 1 2 ? 6. What is the profitability index for the following set of cash flows if the relevant discount rate is 10 percent? Year PI Cash Flow 0 1 2 3 $14,000 ? 7 6 5 7. Consider the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow Cash Flow 40,000 12,000 ? If you require a return of 15 percent, which project should you choose

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