financial manager is using I-IRR to evaluate two mutually exclusive projects that have the following cash flows:

Year	Project 1	Project 2
0	-$8,100	-$15,000
1	6,400	11,200
2	7,200	13,250
3	2,400	3,500

If the cost of capital is 10%, which of the following statements is correct?

Question 1 options:

	Choose Project 1 because the I-IRR is 50.92%
	Choose Project 2 because the I-IRR is 40.21%
	Choose Project 1 because the I-IRR is 4.85%
	Choose Project 2 because the I-IRR is 4.85%
	Choose Project 1 because the I-IRR is 40.21%

What is the NPV of a project that has an initial cost of $5,200 and is expected to generate cash flows of $9,000 in year 1 and $1,800 in year 3? The discount rate is 12%.

Question 2 options:

	$4,270.66
	$9,316.92
	$4,116.92
	$14,670.66
	$14,516.92

A project costs $7,200 and will produce cash flows of $3,400 in year 1, $4,900 in year 2, and $5,000 in years 3. If the discount rate is 15 percent, what is the discounted payback period? If the required discounted payback period is 2.55 years, should this project be accepted or rejected?

Question 3 options:

	2.16 years; accepted
	1.47 years; accepted
	1.78 years; accepted
	1.78 years; rejected
	2.16 years; rejected

A project costs $16,900 and will produce cash flows of $13,400, $10,000, and $8,200 in years 1-3, respectively. If the discount rate is 11 percent, what is the profitability index? The project should be _______, since the profitability index needs to be ______.

Question 4 options:

	1.55; accepted; greater than 1
	1.87; accepted; greater than 1
	1.35; rejected; greater than 1
	1.87; accepted; greater than 0
	1.55; accepted; greater than 0

Assuming a normal cash flow pattern, the payback period of a project will decrease if:

Question 5 options:

	the dollar amount of each future cash flow is increased.
	the time period of the project is increased.
	the initial cost of the project is increased.
	the duration of the project is lengthened.
	the cash inflows are moved later in time.