1. You are given these cash flows for an investment project shown below:
0: -$200,000
1: +$110,000
2: +$121,000
The internal rate of return (IRR) of the project is _____.
a) 5%
b) 15%
c) 1.155%
d) 10%
2. You are given these cash flows for an investment project (the time 0 cash flow is missing):
0: _______
1: +$115,000
2: +$132,250
If the required return (cost of capital) is 15%, and the net present value (NPV) of the project is +$25,000, what is the missing time 0 cash flow?
a) -$150,000
b) -$175,000
c) -$197,250
d) +$150,000