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The Onion Corporation is considering an investment that will cost $920,000 today. The investment will produce cash flows of $150,000 in Year 1, then $270,000

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The Onion Corporation is considering an investment that will cost $920,000 today. The investment will produce cash flows of $150,000 in Year 1, then $270,000 in Years 2-4, and finally $200,000 in Year 5. The discount rate that the firm uses for projects of this type is 11.25% The NPV of this investment is: Select one: O a $192,369 O b. $378,458 O c $540,000 d. $112,583 Significant advantage of the IRR method is that it: Select one: O a. avoids the size disparity problem O b. provides the most realistic reinvestment assumption O c. considers all the cash flows for a project along with their timing O d. provides a means to choose between mutually exclusive projects The Jalapeno Corporation is considering the following three MUTUALLY EXCLUSIVE projects. For Plan A, the initial cash outlay is $3,600,000. Then the following cash inflow is $7,000,000 in Year 5. For Plan B, the initial cash outlay is $6,000,000. Then the following cash inflows are $4,000,000 in Year 1, then $3,000,000 in Year 2, and finally $2,000,000 in Year 3. For Plan C, the initial cash outlay is $3,500,000 Then the following cash inflows are $2,000,000 in Year 1, followed by another $2,000,000 in Years 3-5. If the company has a 12% cost of capital, what decision should be made regarding the projects above? Select one: O a. Accept A ob. Accept C O c. Accept B d. Accept A, B and C

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