(15 points) Suppose that projects cash flows are C0 $82, C1 $30, C2 $100, C3 $100, C4 $150 Required rate of return is 10 (a) (5 points) Compute NPV Should you take the project based on the NPV rule (b) (7 points) Compute IRR of this project What would be an appropriate IRR rule for this project (i e , for which required rates of return the project should be accepted) (c) (3 points) Suppose now that signs of cash flows are flipped, i e , C0 $82, C1 $30, C2 $100, C3 $100, C4 $150 What is IRR rule now 2 (15 points) Suppose that project's cash flows are Co $82, C1 $30, C2 $100, C3 $100, C4 $150 Required rate of return is 10 (a) (5 points) Compute NPV Should you take the project based on the NPV rule (b) (7 points) Compute IRR of this project What would be an appropriate IRR rule for this project (i e , for which required rates of return the project should be accepted) (c) (3 points) Suppose now that signs of cash flows are flipped, i e , Co $82, C1 $30, C2 $100, C3 $100, C4 $150 What is IRR rule now

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Question: (15 points) Suppose that projects cash flows are C0 = $82, C1 = $30, C2 = $100, C3 = $100, C4 = $150. Required rate

(15 points) Suppose that projects cash flows are C0 = $82,

(15 points) Suppose that projects cash flows are C0 = $82, C1 = $30, C2 = $100, C3 = $100, C4 = $150. Required rate of return is 10%.
1. (a) (5 points) Compute NPV. Should you take the project based on the NPV rule?
2. (b) (7 points) Compute IRR of this project. What would be an appropriate IRR rule for this project (i.e., for which required rates of return the project should be accepted)?
3. (c) (3 points) Suppose now that signs of cash flows are flipped, i.e., C0 = $82, C1 = $30, C2 = $100, C3 = $100, C4 = $150. What is IRR rule now?

2. (15 points) Suppose that project's cash flows are Co = $82, C1 = -$30, C2 = -$100, C3 = -$100, C4 = $150. Required rate of return is 10%. (a) (5 points) Compute NPV. Should you take the project based on the NPV rule? (b) (7 points) Compute IRR of this project. What would be an appropriate IRR rule for this project (i.e., for which required rates of return the project should be accepted)? (c) (3 points) Suppose now that signs of cash flows are flipped, i.e., Co = $82, C1 = $30, C2 = $100, C3 = $100, C4 = $150. What is IRR rule now

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