1. What is the true IRR of the project with the following cash flows if the firm would be able to reinvest the cash inflows at a rate of return equal to 10%?
Year 0: -$400
Year 1: $200
Year 2: $200
Year 3: $500
a. 19.88%
b. 36.88%
c. 25.09%
d. 29.93%
e. 33.98%
2. What is the NPV of the project with the following cash flows?
Year 0: -$400
Year 1: $200
Year 2: $200
Year 3: $400
The WACC for the project is 10%.
a. $269.6
b. $255.3
c. $266.4
d. $247.63