Question

QUESTION 1

1. Maxwell Feed & Seed is considering a project that has the following cash flow data.  What is the project's IRR?  

   Year                                    0                    1                    2                    3                    4                    5  

   Cash flows                  -$9,500         $2,000          $2,025          $2,050          $2,075        $2,100

   		2.82%
   		3.10%
   		2.08%
   		2.31%
   		2.57%

10 points   

QUESTION 2

1. Which of the following are limitations of the regular payback period

   		it takes into account the time value of money
   		it utilizes an arbitrary cut-off criterion
   		it uses cash flows generated by the project beyond the end of the payback period
   		it is simple to calculate

10 points   

QUESTION 3

1. Jefferson Corporation is considering an expansion project. The necessary equipment could be purchased for $15 million and shipping and installation costs are another $500,000. The project will also require an initial $2 million investment in net working capital. The company's tax rate is 40%. What is the project's initial investment outlay (in millions)?

   		$15.0
   		none of the other available choices
   		$17.5
   		$15.5
   		$17.0

10 points   

QUESTION 4

1. Ella Inc. is considering purchasing a new milling machine. The new machine costs $133,143, plus installation fees of $15,193 and will generate revenue of $3,458,356 per year and cost of good sold of $1,010,884 over its 5-year life. The machine will be depreciated on a straight-line basis over its 5-year life to an estimated salvage value of 0. Mystic’s marginal tax rate is 0%. Mystic will require $23,868 in NWC if the machine is purchased. Determine the annual operating cash flow in if the machine is purchased. round your answer to two decimals

10 points   

QUESTION 5

1. You have been offered a unique investment opportunity. If you invest $875 today, you will receive $319 one year from now, $798 two years from now, and $1,937 three years from now. What is the NPV of the opportunity if the cost of capital is 8% per year?  

Answer 1

Question 1
The correct answer is 2.57%
Year	Cash Flow
0	-9500
1	2000
2	2025
3	2050
4	2075
5	2100
IRR	2.57%
Question 2
The correct answer is it utilizes an arbitrary cut-off criterion
There are certain limitations of regular payback period
Regular payback period utilizes an arbitratry cut off critrerian
ii) It ignores the risk associated with the project
iii) It ignores time value of money
Question 3
The correct answer is $ 17.5
	In million
Equipment cost	15
Shipping and installation cost	0.5
Net working capital	2
	17.5
Please post other questions separately since all the questions are different
I have provided the solution for first 3 questions