Use this information to answer questions 9 18

Intel is contemplating a new project where they will bring their computer chip manufacturing business back to the United States. They are estimating that they will invest $500,148 initially then will have positive cash flows over the next four years of:

Year 1: $95,000

Year 2: $125,000

Year 3: $145,800

Year 4: $235,000

Use a WACC of 6.77

QUESTION 9

Based on the information in Part II of the Intel project, what is the NPV of the project?

	A.	-$903.77
	B.	$1,498.01
	C.	$2,030.54
	D.	$4,438.73

QUESTION 10

Based on the NPV, Intel SHOULD NOT go forward with this project.

True

False

QUESTION 11

We can use the IRR method to evaluate this project because it has normal cash flows.

True

False

QUESTION 12

Based on the information in Part II of the Intel project, what is the IRR of the project?

	A.	5.59%
	B.	6.27%
	C.	6.70%
	D.	7.42%

QUESTION 13

Based on this IRR Intel SHOULD move forward with this project.

True

False

QUESTION 14

Based on the information in Part II of the Intel project, what is the MIRR of the project?

Use the WACC as both the reinvestment rate and the finance rate.

	A.	5.82%
	B.	6.72%
	C.	7.22%
	D.	13.37%

QUESTION 15

Based on the MIRR, Intel SHOULD go forward with this project.

True

False

QUESTION 16

Based on the information in Part II of the Intel project, what is the payback period for the project?

	A.	2.57 years
	B.	3.57 years
	C.	3.77 years
	D.	This project has no payback period

QUESTION 17

Based on the information in Part II of the Intel project, what is the discounted payback period for the project?

	A.	2.08 years
	B.	3.89 years
	C.	4.87 years
	D.	This project has no discounted payback period

1. 	A.	2.08 years
   	B.	3.89 years
   	C.	4.87 years
   	D.	This project has no discounted payback period

3 points

QUESTION 18

Use part III of the information to answer this.

What are BearKat Enterprises year 0 cash flows for this project?

	A.	-$263,800
	B.	-$284,000
	C.	-$301,000
	D.	-$321,000