A projects cash flows are provided in the table below, assuming a hurdle rate of 8.5

a) What is the net present value of this project?

b) What is the internal rate of return of this project?

c) What is the payback period (in years) of this project? You may use linear interpolation of cash flow within a year, if needed.

d) What is the profitability index of this project?

e) What is the modified internal rate of return of this project if the finance rate is 8.5% and the reinvestment rate is 11.4%?

\begin{tabular}{|l|l|} \hline Year & Cash Flow \\ \hline 0 & 87,000 \\ \hline 1 & 40,000 \\ \hline 2 & 42,000 \\ \hline 3 & 19,000 \\ \hline \end{tabular}