Question 14 1 

pts
A company is analyzing two mutually exclusive projects, S and L, whose cash flows are shown
below:
Years                  0                        1                       2                      3                    4
    S                 -1098                  711                    429                  184                 96
    L                 -1476                  1499                  423                  320                 -96
The company’s cost of capital is 15 percent, and it can obtain an unlimited amount of 
capital at that cost.  What is the regular IRR (not MIRR) of the better project, that is, 
the project that the company should choose if it wants to maximize its stock price?
Group of answer choices
31.69%
33.69%
30.69%
32.69%
29.69%
1 2
0 -1098 -1476
1 711 1499
2 429 423
3 184 320
4 96 -96
IRR 16.30% 32.69%

Question 15 1 pts
Your company is planning to open a new gold mine that will cost $2.38 million to build, 
with the expenditure occurring at the end of the year two years from today.  
The mine will bring year-end after-tax cash inflows of $1.68 million at the end of the 
two succeeding years, and then it will cost $0.43 million to close down the mine at
the end of the third year of operation.  What is this project’s IRR?
17.86%
18.46%
17.56%
18.16%
17.26%

Question 16 1 pts
Haig Aircraft is considering a project that has an up-front cost paid today at t = 0. 
The project will generate positive cash flows of $77,923 a year at the end of each 
of the next 3 years.  The project’s NPV is $66,809 and the company’s WACC is 
14.4%.  What is the project’s regular payback?
 1.35 years
1.65 years
1.45 years
1.55 years
1.75 years

Question 17 1 pts
Martin Manufacturers is considering a five-year investment that costs ($117,208).
The investment will produce cash flows of $36,250 each year for the first two years, 
$40,194 a year for each of the remaining three years.  The company has a WACC 
of 14%.  What is the MIRR of the investment?
16.65%
16.75%
16.55%
16.95%
16.85%

Question 18 1 pts
Green Grocers is deciding among two mutually exclusive projects.  The two projects have the
following cash flows:
Year                                         Project A CF                               Project B CF
0                                                -$50,242                                      -$37,170
1                                                $5,159                                            $9,765
2                                                $7,886                                           $12,255
3                                                $48,776                                        $20,816
4                                                $17,327                                        $16,486
The company’s weighted average cost of capital is 14.9 percent (WACC = 14.9). What is the
highest internal rate of return (IRR)?
18.93%
19.53%
18.73%
19.13%
19.33%
Question 191 pts
Braun Industries is considering an investment project that has the following cash flows:
                                                                                                    Project
                                                   Year                                     Cash Flows    
                                                      0                                             -$800
                                                      1                                              $466
                                                      2                                              $331
                                                      3                                              $323
The company’s WACC is 13.4 percent.  What is the project’s payback, internal rate of return
(IRR), and net present value (NPV)?
2.31 years; 20.44%; $89.83
2.41 years; 21.44%; $89.83
2.01 years; 20.44%; $89.83
2.01 years; 20.44%; $109.83
2.01 years; 23.44%; $89.83
CCF PV
0 -800 -800 1 -800
0.88183 410.934
1 466 -334 4 7
0.77763 257.396
2 331 -3 2 1
0.68574 221.494
3 323 320 2 7
89.8255
2.01   1
IRR 20.44%