1. Compute the internal rate of return for the following cash flows: Period 0: -1750 Period 1: 1200 Period 2: 600 Period 3: 350 Enter your answer in percent and round to the nearest 0.01.
2. Compute the modified internal rate of return for the following cash flows using a discount rate of 8%:
Period 0: -1636
Period 1: 686
Period 2: 787
Period 3: 644
Enter your answer in percent and round to the nearest 0.01%.
3. Find the crossover rate of projects A and B
Year Project A Project B
0 -1350 -450
1 975 390
2 700 275
Enter your answer in percent and round to the nearest 0.01%.
4.Machinery costs $1 million today and $100,000 per year to operate. It lasts for 8 years. What is the equivalent annual annuity if the discount rate is 9%? Enter your answer in dollars and round to the cent.
Remember that costs are negative cash flows; so, include the negative sign.
5. Find the profitability index of a project with the following cash flows using a discount rate of 10%:
Period 0: -1000
Period 1: 720
Period 2: 351
Period 3: 272
Enter your answer in a decimal and round to the hundredths place.