You plan to invest $1,000 in a project. The project will give you cash flows for 30 years of $100. If the discount rate is 12%, What are the payback period and the net present value. Set the equation to solve for the IRR in this problem.

Assume now you think 12% is not a good discount rate so you will not use this anymore. You plan to finance the $1000 with debt only. What inputs do you need to compute the NPV using the previous information? Describe any input you need and explains where is this coming from.

Finally, you managed to finance the project with $700 debt and $300 equity. The interest rate on debt is 7%. The return on the market portfolio is 15%. The covariance between this companys project and the market portfolio is 0.06. The market portfolio standard deviation is 20%. The risk free rate is 2%. What is the WACC of the project? Assume taxes are 40%.

What is the net present value of the project? Set the equation to solve for the IRR?