1. You are considering the following two mutually exclusive projects. The required rate of return is 14.6 percent for project A and 13.8 percent for project B. Which project should you accept and why (find their NPVs)?

Year	Project A	Project B
0	-$50,000	-$50,000
1	24,800	41,000
2	36,200	20,000
3	21,000	10,000

2. Cool Water Drinks is considering a proposed project with the following cash flows. Should this project be accepted based on the combined approach to the modified internal rate of return if both the discount rate and the reinvestment rate are 12.6 percent? Why or why not?

Year	Cash Flow
0	-$148,500
1	32,800
2	64,200
3	-7,500
4	87,300

3. You are considering a project with an initial cost of $7,800. What is the payback period for this project if the cash inflows are $1,100, $1,640, $3,800, and $4,500 a year over the next four years, respectively?