You have 3 projects with the following cash flows:

Year	0	1	2	3	4
Project 1	-150	19	39	60	80
Project 2	-826	0	0	7002	-6490
Project 3	19	40	62	81	-247

a. For which of these projects is the IRR rule reliable?(Select from the drop-down menus.)

The IRR rule is reliable for (project 1, 2, or 3) unless all of the (negative or positive) cash flows of the project precede the (positive or negative) ones, the IRR rule may give the wrong answer and should not be used. Furthermore, there may be multiple IRRs or the IRR may not exist.

b. Estimate the IRR for each project (to the nearest 1 %).

Project 1:

Project 2:

Project 3:

c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%?

The NPV for project 1 for a cost of capital of 5% is ______ (Round to the nearest cent.)

The NPV for project 1 for a cost of capital of 20% is ______ (Round to the nearest cent.)

The NPV for project 1 for a cost of capital of 25% is ______ (Round to the nearest cent.)

The NPV for project 2 for a cost of capital of 5% is ______ (Round to the nearest cent.)

The NPV for project 2 for a cost of capital of 20% is ______ (Round to the nearest cent.)

The NPV for project 2 for a cost of capital of 25% is ______ (Round to the nearest cen

The NPV for project 3 for a cost of capital of 5% is ______ (Round to the nearest cent.)

The NPV for project 3 for a cost of capital of 20% is ______ (Round to the nearest cent.)

The NPV for project 3 for a cost of capital of 25% is ______ (Round to the nearest cen