You have 3 projects with the following cash flows:

Year	0	1	2	3	4
Project 1	$151	$ 21	$ 39	$ 59	$ 80
Project 2	824	00	00	6,999	6,501
Project 3	2020	40	62	81	245

a. For which of these projects is the IRR rule reliable?

b. Estimate the IRR for each project (to the nearest

1%).

c. What is the NPV of each project if the cost of capital is

5%?

20%?

50%?

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

. Unless all of the

negative

cash flows of the project precede the

positive

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%).

The IRR for project 1 is?

(Round to the nearest integer.)The IRR for project 2 is?

(Round to the nearest integer.)The IRR for project 3 is?

(Round to the nearest integer.)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

$nothing.

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

20 %

is

$nothing.

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

50 %

is

$nothing.

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

5 %

is

$nothing.

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

20 %

is

nothing.

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

50 %

is

$nothing.

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

5 %

is

$nothing.

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

20 %

is

$nothing.

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

50 %

is

$nothing.

(Round to the nearest cent.)