Turner Video will invest $76,344 in a project. The firm’s cost of capital is 10 percent. The investment will provide the following inflows:

The internal rate of return is 11 percent.
a. If the reinvestment assumption of the net present value method is used, what will be the total value of the inflows after five years? (Assume the inflows come at the end of each year.)

b. If the reinvestment assumption of the internal rate of return method is used, what will be the total value of the inflows after five years?
c. Generally is one investment assumption likely to be better than another?

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Year 1........ 2..... 3 4 5 Inflow $15,000 17,000 21,000 25,000 29,000