Question: 1. Your firm has a potential project that will cost $5,000 now to begin.The project will then generate after-tax cash flows of $141 at the

1. Your firm has a potential project that will cost $5,000 now to begin.The project will then generate after-tax cash flows of $141 at the end of the next three years and then $1,833 per year for the three years after that.If the discount rate is 1.06% then what is the NPV?

2. The disadvantages of the IRR period method is that it

Group of answer choices

Requires complex calculations

Does not require a discount rate (for calculation)

Only works for normal cash flows

Adjusts for TVM and therefore risk (in comparing to hurdle rate that adjusts for risk)

Requires a lot of data (estimates of all CFs)

3.What are advantages of payback period?

Group of answer choices

Does not require all CFs, Does not fully adjust for TVM

Does not require discount rate

Measures Liquidity, Easy to communicate

Does not require complex calculations

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