You are considering building a shopping mall. The initial investment is $1.51 million. The cash flows are $440,000 for year 1, $210,000 for year 2, $100,000 for year 3, and $180,000 for year 4. What are the net present value (NPV) and profitability index (PI) of the project if the cost of capital is 10%? Compute the internal rate of return (IRR) for the project.

What is the NPV of the shoppingmall? (Round to the nearestcent.)

What is the PI of the shoppingmall? (Round to two decimalplaces.)

What is the IRR of the shoppingmall? (Round to two decimalplaces.)

2.Find the profitability index (PI) for the following project. The project requires an initial investment of $1,830 and provides 5 annual cash inflows of $235. Assume a cost of capital of 14.6%.

The present value of the cash inflows is ? (Round to the nearestcent.)

The profitability index is ? (Round to two decimalplaces.)

3.Calculate the (a) net present value (NPV), (b) profitability index (PI), and (c) internal rate of return (IRR) for Projects 1 and 2 (cash flows shown below), assuming a required return of 11%.

Year Project 1 Project 2

0 $-410 $-420

1 $160 $110

2 $180 $190

3 $110 $120

4 $340 $360

What is the NPV of Project1? $(Round to the nearestcent.)

What is the NPV of Project2? $(Round to the nearestcent.)

What is the PI of Project1?(Round to two decimalplaces.)

What is the PI of Project2? (Round to two decimalplaces.)

What is the IRR of Project1? % (Round to two decimalplaces.)

What is the IRR of Project2? % (Round to two decimalplaces.)