A firm has a project with the following cash flows (in Millions). The WACC for the firm is 6.24%.

1. The project in Part 1 has normal cash flows.

   True

   False

2.

1. What is the NPV of this project?

   All answers below are in Millions of dollars

   	A.	$10.78
   	B.	$49.09
   	C.	-$1.16
   	D.	-$50.21

3.

1. What is the IRR of this project?

   	A.	6.41%
   	B.	5.95%
   	C.	2.15%
   	D.	This project does not have normal cash flows so IRR cannot be calculated

4.

1. What is the MIRR of this project? Use the WACC as the finance rate and the reinvestment rate.

   	A.	3.00%
   	B.	3.73%
   	C.	6.43%
   	D.	This project does not have normal cash flows so you cannot calculate an MIRR.

5

1. What is the payback period for this project?

   	A.	3.52 years
   	B.	4.49 years
   	C.	4.81 years
   	D.	5.49 years

6.

1. What is the discounted payback period?

   	A.	3.46 years
   	B.	4.46 years
   	C.	5.46 years
   	D.	This project does not have a discounted payback period.

7.

1. Which of the following is a TRUE statement?

   	A.	All methods indicate that this project will be profitable
   	B.	The NPV indicates that this project will be profitable, but all other methods indicate that it will be unprofitable.
   	C.	NPV indicates that this project will NOT be profitable, but IRR shows it will be profitable
   	D.	Based on the NPV, IRR and MIRR we should NOT go forward with this project.

8.

1. If the WACC is changed to 25%, which of the following will occur?

   	A.	The NPV, the IRR and the MIRR will change
   	B.	The NPV and the IRR will change, but the MIRR will NOT change
   	C.	The NPV and the MIRR will change, but the IRR will NOT change
   	D.	The NPV, the IRR and the MIRR will all remain the same.

Year 0 1 2 Cash Flows $ (350.00) $ 23.00 $ 25.00 $ 45.00 $ 123.00 $ 165.00 3 4 5