Remember when doing NPV & IRR, use my in-class assignment as a guide and utilize the PVA table. This will be different than Chapter 11, but will save you time. 1) Cerritos Company can invest in each of three cheese-making projects: C1, C2, and C3. Each project requires an initial investment of $438,374 and would yield the following annual cash flows. See my hints to the right C1 C2 C3 Year 1 $ 24 000 $ 192 000 $ 360 000 Year 2 216 000 192 000 120 000 Year 3 Totals 336 000 192 000 $ 576 000 $ 576 000 $ 96 000 576 000 Required A- Assuming that the company requires a 12% return from its investments, use net present value to determine which projects, if any, should be acquired. B- Using the answer from part 1, explain whether the internal rate of return is higher or lower than 12% for project C2. C- Compute the internal rate of return for project C2 Hint: Notice that C2 is really the only project that pays off in equal annual amounts. To get the PV of the amounts, use the PV of $1 table for C1 and C3. Calculate each three times. For instance on C1, get the PV of $1 for $24000 for the n of 1 and then get the PV of $1 for $216,000 for the n of 2 and then get the PV of $1 for $336,000 for the n of 3. Add each year up for the total PV. Do the same for C3. For C2, you can use the PVA table with an n of 3.