Question 1: What is the present value (PV) of the following series of cash flows at 10% and its IRR? Please explain the sensitivity of the present value and IRR to different discount rates. Year 0: -2,000$ | Year 1: +800$ | Year 2: +600$ | Year 3: +700$ | Year 4: +500$

Question 2: Draw a present value (PV) profile of the following project and determine the IRR(s). Is the project acceptable at 10% cost of capital? Please explain your assertions. Year 0: -4,000$ | Year 1: +10,200$ | Year 2: -6,300$ Observation: if you find cumbersome to draw the PV profile you can only describe it in words, namely:

Question 3: A firm is considering a project with a cash flow outlay of 1,000$ now and 5 annual inflows of 500$ a) What is the NPV (net present value) at 10%. What is the NPV at other discount rates? b) What is the NPV assuming a general inflation rate of 8% and an increase in cash flow to $510 per year? (a) what's on X axes, (b) what's on the Y axes, (c) form of the graph, (d) where it intercepts the X axes etc.