Question 011

11-1 NPV Project K costs $52,125, its expected net cash inflows are $12,000 per year for 8 year, and its WACC is 12 percent. What is the projects NPV?

11-2 IRR Refer to problem 11-1. What is the projects IRR?

11-3 Payback period Refer to problem 11-1. What is the projects payback?

111-4 Discounted payback Refer to problem 11-1. What is the projects discounted payback?

11-6 NPV Your division is considering two projects with the following net cash flow (in millions):

Years	0	1	2	3
Project A	-25	5	10	17
Project A	-20	10	9	6

1. What are the projects NPVs, assuming the WACC is 5 percent? 10 percent? 15 percent?
2. What are the projects IRRs at each of these WACCs?