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 $271 at

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 $271 at the end of the next three years and then $1,173 per year for the three years after that. If the discount rate is 4.6% then what is the NPV?

True/False:

2. The Internal Rate of Return (IRR) is the discount rate that equates the NPV of an investment opportunity with $0

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4. Explain the strengths and weaknesses of each approach.

d. Describe any challenges in trying to communicate. If there were no challenges, explain why you think it was so easy.

3. Identify the methods used within each of the three approaches.