Q1 The Whitton Company has an opportunity to buy a computer now for $25,000 that will yield annual net cash inflows of $10,000 for the next three years, after which its resale value would be zero.Whitton's cost of capital is 16%

What is the IRR for the investment?

Select one:

a.20.1%

b.11.5%

c.12.3%

d.9.7%

Q2 SmallCo, which has a cost of capital of 12%, is considering the following project:

Year0123Cash flows of project$(2,000)$1,000$800$700

What is the NPV of the project?

Select one:

a.$500

b.$700

c.$29

d.$2,029

Q3 The projected net cash flows for three projects are (in $thousands):

ProjectYear 0Year 1Year 2Year 3Year 4Year 5A$(350)$100$200$100$100$140B(350)40100210260160C(350)200150240400

The payback period for each project (in years) is:

Select one:

a.A: 3; B 3; C 2

b.A: 2.5; B 3; C 2

c.A: 3; B 2; C 3

d.A: 2.5; B 2; C 3

Q4 The projected net cash flows for a project are (in $thousands):

YearYear 0Year 1Year 2Year 3Year 4Year 5$(350)$40$100$210$260$160

Assuming the initial investment is depreciated over the life of the project, the accounting rate of return for the project is

Select one:

a.25%

b.33%

c.40%

d.48%