1, XYZ is evaluating a project that would require an initial investment of $70,800.00 today. The project is expected to produce annual cash flows of $8,900.00 each year forever with the first annual cash flow expected in 1 year. The NPV of the project is $7,300.00. What is the IRR of the project?

12.57% (plus or minus 0.02 percentage points)

11.40% (plus or minus 0.02 percentage points)

14.02% (plus or minus 0.02 percentage points)

10.31% (plus or minus 0.02 percentage points)

None of the above is within 0.02 percentage points of the correct answer

2,

XYZ is evaluating a project that would require the purchase of a piece of equipment for $440,000 today. During year 1, the project is expected to have relevant revenue of $786,000, relevant costs of $201,000, and relevant depreciation of $132,000. XYZ would need to borrow $440,000 today to pay for the equipment and would need to make an interest payment of $33,000 to the bank in 1 year. Relevant net income for the project in year 1 is expected to be $337,000. What is the tax rate expected to be in year 1?

		A rate equal to or greater than 21.96% but less than 26.61%
		A rate less than 21.96% or a rate greater than 46.34%
		A rate equal to or greater than 31.02% but less than 38.39%
		A rate equal to or greater than 38.39% but less than 46.34%
		A rate equal to or greater than 26.61% but less than 31.02%