The following are the cash flows of two projects:

Year Project A Project B

0 $(230) $(230)

1 110 130

2 110 130

3 110 130

4 110

a.If the opportunity cost of capital is 11%, calculate the NPV for both projects.(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Project NPV

Division A

Division B

A project that costs $5,350 to install will provide annual cash flows of $1,800 for each of the next 6 years.

a.What is NPV if the discount rate is 11%?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

b.How high can the discount rate be before you would reject the project?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

If you insulate your office for $28,000, you will save $2,800 a year in heating expenses. These savings will last forever.

a.What is the NPV of the investment when the cost of capital is 4%? 10%?

b.What is the IRR of the investment?(Enter your answer as a whole percent.)

c.What is the payback period on this investment?

payback period years