1. Answer questions 1-4 using the information below.

Here is the cash flow of project A. Assume the discount rate is 15%.

Year0 (initial cost): -15000

Year1: 5000

Year2: 6000

Year3: 7000

Year4: 7000

Calculate the payback period.

A.		3
B.		2
C.		2.57
D.		3.57

2. Calculate the discounted payback period.

A.		3.64
B.		2.57
C.		3.21
D		3.38

3. Calculate NPV and based on that decide about the project.

A.		$2,490 - reject
B.		$2,490 - accept
C.		$1,440 - accept
D.		$1,440 - reject

4. I calculated the NPV of this project using three different discount rates and the results are the following:

NPV @ 20% discount rate = $760

NPV @ 25% discount rate = -$708

NPV @ 30% discount rate = -$1966

Whats your estimate of this projects IRR?

A		Between 25% and 30%
B.		Greater than 30%
C		Less than 20%
D.		Between 20% and 25%