You are evaluating a proposed project for your company. The project is expected to generate the following end-of-year cash flows :

0------- -$3000

1--------- $300

2----------$400

3---------- $600

4---------- $600

5----------- $800

6----------- $800

7------------$800

8----------- $600

You have been told you should evaluate this project with an Interest rate of 9%. What is the project's NPV?

$185.79 $169.58 $51.43 $235.97 $135.60

Your group leader has now told you that the risk of the project was understated before. As a result, she tells you to recalculate the project's NPV with an 11% interest rate. What is the new NPV?

-$66.36 -$71.99 -$22.97 -$115.38 -$60.74

When the project was first evaluated at 9%, you would have advised that the company ___ the project because It___ value for the company. But now with an 11% interest rate, you will advise the company to ___ the project because it ___ value for the company.

Calculate the project's Internal rate of return (IRR).

9.99% 11.52% 10.81% 14.76% 12.45%