1. Winter Wear is considering a 5-year project with an initial cost of $221.000. The project will produce cash inflows (end of the year) of $59, 500 each year over the life of the project. What is the net present value (NPV), if the required rate of return is 14.8 percent? Also, state your accept/reject decision.
2. A project has a required return of 12.25 percent. The project's initial cost is $13,000 and its cash flows are: year 1 = $4, 800, year 2 = $9,000, and year 3 = $3,000. What is the project's IRR? Also, state your accept/reject decision
3. The Candy Hut is considering a project with an initial cost of $7, 500. The project will produce cash flows of: $3,000 in year 1. $2, 500 in year 2. $3,000 in year 3, and $2, 500 in year 4 What is the payback period? If the standard payback used by the firm is 2 years; state your accept/reject decision