You recently went to work for Allied Components Company, a supplier of auto repair parts used in the after-market with products from Daimler AG, Ford, Toyota, and other automakers. Your boss, the chief financial officer (CFO), has just handed you the estimated cash flows for two proposed projects. Project L involves adding a new item to the firms ignition system line; it would take some time to build up the market for this product, so the cash inflows would increase over time. Project S involves an add-on to an existing line, and its cash flows would decrease over time. Both projects have 3-year lives because Allied is planning to introduce entirely new models after 3 years. Here are the projects' cash flows (in thousands of dollars):

Year	CLL	CFS
0	($100)	($100)
1	$50	$90
2	$50	$40
3	$70	$30

Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. The CFO also made subjective risk assessments of each project, and he concluded that both projects have risk characteristics that are similar to the firm's average project. Allieds WACC is 15%. You must determine whether one or both of the projects should be accepted.

(1) What is each projects NPV?

(2) What is each projects IRR?

(3) Find the MIRRs for Projects L and S.

(4) Find the paybacks for Projects L and S.

As a separate project (Project P), the firm is considering sponsoring a pavilion at the upcoming World's Fair. The pavilion would cost $400,000, and it is expected to result in $7 million of incremental cash inflows during its one year of operation. However, it would then take another year, and $4 million of costs, to demolish the site and return it to its original condition. Thus, Project P's expected cash flows (in millions of dollars) look like this: Year Cash Flow 0 ($0.4) 1 $7.0 WACC = 12% 2 ($4.0) The project is estimated to be of average risk, so its WACC is 12%.

(5) What is Project Ps NPV? What is its IRR? Its MIRR?