USE EXCEL PLEASE

1. Consider the following four mutually exclusive projects: M Initial investment 48,000 Annual cash inflow 20,000 Lifecycle (years) 5 60,000 12,000 15 L 60,000 16,000 10 36,000 10,000 15 Assume that once you decide on a project, the project is renewed for the foreseeable future. If the required return on each of the four projects is 16%, which project will you choose? 2. Calculate the IRR (or IRRs) for the following project: T=0 T=2 -6,000 14,000 -8,000 a. If your required return is 40% will you take the project? b. For what range of discount rates, will you accept the project? 3. Consider the two mutually exclusive projects: T=0 -1000 -400 T=1 1500 0 T-2 1500 1400 T-3 1500 2650 a. If your cost of capital is 15%, which project will you choose? b. If your cost of capital is 10% which project will you choose? c. Over what range of discount rates will you choose project A