Use the following information to answer the questions 1-3

The cost of project = $100,000. You expect the project to make $500,000 in seven years (CF of year 7 = $500,000, cash flow from year 1 to year 6=0). Your cost of capital = 10%.

1) The NPV for this project =:

A) $156,579

B) $140,101

C) $129,428

D) $171,416

2) The IRR for this project =:

A) 25.85%

B) 18.61%

C) 31.04%

D) 22.49%

3) The decision that you should make for this project is

A) reject it since the NPV < 0.

B) reject it since the NPV > 0.

C) accept it since the IRR < 10%.

D) accept it since the IRR > 10%.