Use the following information for Questions 16 20.

Please analyze the following project. All cash flows are in millions, they are assumed to be after-tax and they occur evenly over each year. The client requires a 20% rate of return. A. Based on your analysis, which one of the following statements is correct?

• You should reject this Project, since its IRR greater than the hurdle rate of 20%.

• You should call in a consultant with more experience than yourself

• You should accept the Project since the Payback is very short

• You should accept this Project, since its NPV is positive

B) 18. The NPV for this Project is (given a 20% discount rate):

• The Project has an NPV of $415.25

• The Project has an NPV of $257.65

• The Project has an NPV of $414.50

• The Project has an NPV of $534.72

Year Discounted Cash Flows O 1 Cash Flow -4,500 1,500 1,700 4,500 2 3 IRR NPV The IRRs for this project is