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ProA Project Cash Flow ($100.000) 1$ 100.000) 39,500 9.500 150.000 The firm's cost of capitalis 10 percent. Based only on the information even a. What are the NPV for Project A and B which project do you choose based on the NPV? b. What are the payback periods for Project A and B? Which project do you choose based on the payback periods? c. What are the IRR for Projects A and B? Which project do you choose based on the NPV? 2. Alyeska Salmon Inc., a large salmon canning firm operating out of Valdes, Alaska, has a new automated production line project it is considering the project has a cost of $275,000 and has an expected life of eight years. The project provides after-tax annual cash flows of $73,306 per year for the first five years. In year 6. there is cash OUTFOW of $100.000. For years 7-8, the net cash flows will be $89.000 per year. The firm's management is uncomfortable with the IRR reinvestment assumption and prefers the modified IRR approach. You have calculated a cost of capital for the firm of 12 percent. Calculate the project's MIRR. Show all your work. Should the project be accepted? Explain why or why not. 3. Marge's Campground is considering adding a miniature golf course to its facility. The course equipment she wants would cost $300,000, and would be depreciated on a straight line basis over 10 years with zero salvage value. However, Marge estimates that the project will be run for 4 years only, and a 4-year time horizon will be used. Further, assume that the company can sell the equipment for $200,000 at the end of year 4. Marge estimates the income from the golf fees would be $280,000 a year with $100,000 variable cost. The fixed cost would be $50,000.. The project will require $10,000 of net working capital which is recoverable at the end of the project. Assume a 34% marginal tax rate for the company and the project's required rate of return of 12 percent. a. Calculate annual operating CFs for the miniature golf facility for years 1-4. Show your work b. What is the BV of the equipment at the end of year 4? Is there a tax liability or tax credit on the sale of the equipment? Calculate total CF for year 4 including the after-tax selling price. c. What is the NPV of this project? Would you accept this project? 4. Suppose the US dollar yen spot rate is $0.009, and one yen buys $0.0095 in the 30-day forward exchange market. If rom for a 30-day risk-free security in Japan and in the U.S. are 4% and 5% respectively, a. Show if the Interest Parity relationship hold or not. b. Using $1,000 initial investment, show which security provides higher return. Support your answer with numbers please