Suppose that a project will cost $95,000 initially and it will generate the following nonconventional cash flows:

Year 1: $135,000

Year 2: $120,000

Year 3: $168,000

Year 4: $110,000

Year 5: $122,000

a) If the required return is 10%, would you accept or reject the project? Why? Explain.

b) If the required return is 60%, would you accept or reject the project? Why? Explain.

c) Explain why the IRR generated by a financial calculator can be misleading to answer parts a and b?

d) What are the IRRs of this project within the 0% and 100% rate range? Solve in Excel and upload the Excel file on Blackboard.

e) Using your findings in part c, plot the NPV profile within the 0% and 100% rate range (rate on the horizontal axis and NPV on the vertical axis). Upload the Excel file with the graph on Blackboard.