1. Mille-Hiver Corp. is considering a 20-year project that requires an initial investment of $15 million. The project provides an annual cash inflow of $1.5 million for the first ten years and an annual cash inflow of $2.5 million for the subsequent ten years. If the firm’s required return is 10%, what is the net present value (NPV) of this project? (2 points)

Question 2 Tempest Industries Inc. is considering a 13-year project that requires an initial investment of $50 million. The project provides no annual cash inflow for the first five years, an annual cash inflow of $20 million for the subsequent five years, and an annual cash inflow of $25 million during the final three years. If the firm’s required return for this project is 15%, what is the profitability index (PI) of this project? (2 points)

Question 3 Moonlight Gas & Electric Inc. is undertaking a 50-year project that requires an initial investment of $100 million. The project provides no annual cash inflow for the first ten years, an annual cash inflow of $23 million from Year 11 through Year 20, and an annual cash inflow of $36 million during the subsequent 30 years. If the firm’s required return for this project is 10.20%, what is the internal rate of return (IRR) of this project? (2 points)

Question 4 Martingale Corporation is considering a project that requires an initial investment of $5,000 in Year 0. The project is also expected to have a “net cost” of $5,000 in Year 1. It will then provide a positive annual cash inflow of $7,500 in both Year 2 and in Year 3. The firm’s required return for this project is 12%. What is the project’s modified internal rate of return (MIRR)? (2 points)

Question 5 Consider the project in Question 3. What is the Equivalent Annual Cost (EAC) of the project? (2 points)