QUESTION 4 16 points Save Answer Consider the following cash flows on two projects. If the company uses the IRR rule to choose projects, which of the projects (Project A or Project B) will rank highest? Project A Project B Time 0 -10,000 -5,000 Time 15,000 3,000 Time 25,000 3,000 Time 3 5,000 3,000 Project A O Project B Both are the same Neither (Can't compute) QUESTION 5 16 points Save Answer Mary is in contract negotiations with a publishing house for her new novel. She has two options. She may be paid $50,000 up front and receive royalties that are expected to total $14,000 at the end of each of the next 5 years. Alternatively, she can receive $100000 up front and no royalties. Which of the following investment rules would indicate that she should take the former deal, given a discount rate of 9967 Rule 1: The Net Present Value rule: Rule ll: The Payback Rule with a payback period of 2 years. HINT: What are the inflows and outflows. READ THE QUESTION Rule 11 Rule O None Rule I and II QUESTION 6 20 points Save Answer A company is thinking about marketing a new product. Up-front costs to market and develop the product are $14.7 Million. The product is expected to generate profits of $1.55 million per year for 28 years. The company will have to provide product support expected to cost $290,746 per year in perpetuity. Furthermore, the company expects to invest $48,762 per year for 10 years for renovations on the product. This investing would start at the end of year 7. Assume all profits and expenses occur at the end of the year. Calculate the NPV of this project if the interest rate is 7.73%