Question: Consider a project with the following cash flows: CF0 = -$600, CF1 = $1,110, CF2 = $700, CF3 = -$600, and CF4 = -$1, 200.

Consider a project with the following cash flows: CF0 = -$600, CF1 = $1,110, CF2 = $700, CF3 = -$600, and CF4 = -$1, 200. Use Excel to answer the following questions:

(a) Plot the project's NPV as a function of the discount rate r

(b) Calculate the internal rate of return of this investment opportunity. Would you pursue this project if the opportunity cost of capital is 10%? 50%? 60%?

(c) Calculate the NPV of this investment opportunity under discount rate of 12%. Would you accept this project based on the NPV rule?

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