(40 points) Suppose a project requires an initial cash outflow of $34,900. The project will last...

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(40 points) Suppose a project requires an initial cash outflow of $34,900. The project will last for four years with the annual cash flows given below. The required rate of return is 12%. Year 1 2 3 4 Cash Flows $12,500 $19,700 0 $10,400 (4) Now suppose another project's future annual cash flows are given below with an initial cash outflow $14,900.00). The required rate of return is 12%. Using a graph to explain why you cannot use IRR for capital budgeting in this case. (You do not need to compute anything here.) Year Cash Flow 1 $12,500 2 $12,500 3 $12,500 4 $12,500 5 $12,500 6 $12,500 -$19,700 8 -$20,000 9 -$20,000 10 -$20,000 (40 points) Suppose a project requires an initial cash outflow of $34,900. The project will last for four years with the annual cash flows given below. The required rate of return is 12%. Year 1 2 3 4 Cash Flows $12,500 $19,700 0 $10,400 (4) Now suppose another project's future annual cash flows are given below with an initial cash outflow $14,900.00). The required rate of return is 12%. Using a graph to explain why you cannot use IRR for capital budgeting in this case. (You do not need to compute anything here.) Year Cash Flow 1 $12,500 2 $12,500 3 $12,500 4 $12,500 5 $12,500 6 $12,500 -$19,700 8 -$20,000 9 -$20,000 10 -$20,000