Q$2$: WXB Inc. whose tax rate $=32\%,$ is considering a $20-$year project which requires an initial

investment of $$815,000,$ and has annual cash flows of $$94,000.90-$Day T$-$bills and $30-$year government

bonds are currently paying $2\mathrm{.}5\%$ and $4\mathrm{.}75\%,$ respectively. Should WXB Inc. undertake this project

assuming the opportunity cost of capital $=11\mathrm{.}25\%(*$ assume the following: CCA $=30\%$ and the salvage

value $=$$$280,000.$ How might your answer change if the CFO underestimates the risk by $1\mathrm{.}5\%?$ Q$3$: A company can sell pre$-$fabricated, standardized cottages for $$95,000,$ for which variable costs $=$

$$40,000/$cottage$.$ The company's fixed costs $=$$$900,000.$ The company needs to build a production

facility which would cost $=$ $$5\mathrm{.}0$ million $(10-$year horizon, using the straight$-$line method$).$ Assume a $$0$

salvage value and a $13\%$ required rate of return. Projected sales are $55$ cottages$/$year$.$ Calculate:

accounting break$-$even, cash break$-$even, financial break$-$even, the OCF line, and the NPV $($based on

projected sales$).$Q$1$: Consider the following chart:

Using the modified IRR framework $($MIRR$),$ calculate the IRR of this project $($i$.$e$.,$ what info should the

CFO present$)-$ assume a discount rate $=9\mathrm{.}5\%.$