Forsberg, Inc. is considering two mutually exclusive projects, A and B.

Project A costs $275,000 (initial outlay) and is expected to generate $185,000 in year one and $195,000 in year two. The firm's required rate of return (discount rate) for these projects is 10%

1. The net present value (NPV) for Project A is ___________.

2. The internal rate of return (IRR) for Project A is ____________.

Project B costs $225,000 (initial outlay) and is expected to generate $75,000 in year one, $77,000 in year two, $53,000 in year three, and $43,000 in year four. The firm's required rate of return (discount rate) for these projects is 10%. (3.5 points)

3. The net present value (NPV) for Project B is _____________.

4. The profitability index (PI) for Project B is _____________.

Part II

5. J. Currie, Inc. is considering two mutually exclusive projects, A and B. Project A costs $95,000 and is expected to generate $65,000 in year one and $75,000 in year two. Project B costs $120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three, and $45,000 in year four. The firm's required rate of return for these projects is 10%. The net present value for Project A is______________. (2 points)

6. J. Currie, Inc. is considering two mutually exclusive projects, A and B. Project A costs $95,000 and is expected to generate $65,000 in year one and $75,000 in year two. Project B costs $120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three, and $45,000 in year four. J. Currie, Inc.'s required rate of return for these projects is 10%. The net present value for Project B is__________________. (2 points)

Part III

Bermudez Quilters is considering a project with the following cash flows:

Initial Outlay = $126,000

Cash Flows:	Year 1 = $44,000
	Year 2 = $59,000
	Year 3 = $64,000

7. If the appropriate discount rate is 11.5%, compute the NPV of this project. (2 points)

Part IV

Your company is considering a project with the following cash flows:

Initial Outlay = $3,000,000

Cash Flows Year 1-8 = $547,000

8. Compute the internal rate of return (IRR) on the project. (2 points)