Project 1 Cashflows are given as follows: Time 0 1 2 3 4 5 CF (679,000) 150,960 175,800 215,700 230,840 276,500 A) Find the Net Present Value for Project 1 at the following market required rates of return. i) 15% Accept Project? Why? (Rule) ii) 12% Accept Project? Why? (Rule) iii) 8% Accept Project? Why? (Rule) iv) 5% Accept Project? Why? (Rule)

B) Find the IRR for Project 1 cash flows. Round percent to two decimal places. i) IRR? ii) For a 12% required rate of return would you accept the project? iii) Why (what is the rule?)

C) Find the Payback for Project 1. Hint: Year 1 Year 2 Year 3 Year 4 Step 3: Then add up the # of Full Years & the Partial Years in row 24 i) What is the payback for Project 1 in years. Years ii) For a management payback cutoff of 3 years would you accept the project? iii) Because of what rule? Ie. Why?

D) Find the Profitability Index for Project 1? i) What is the Profitability Index for Project 1 at the 8% required return? ii) Interpret the PI. iii) For your calculated PI would you accept the project? iv) Because of what rule?