1.) Consider the following potential investment:
|
Discount Rate
|
10%
|
|
|
|
|
Time
|
Cash Flow
|
|
0
|
-$50,000
|
|
1
|
$14,000
|
|
2
|
$14,000
|
|
3
|
$14,000
|
|
4
|
$14,000
|
|
5
|
$14,000
|
Determine the Payback Period, Net Present Value, and Internal Rate of Return on this project. Show all calculations. Based on your analysis, should the firm accept the project? Be sure to justify your recommendation.
2.) Provide an example of each of the following asset acquisition risk categories: (1) constraint-related, (2) risk-related and (3) non-constraint-related.