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FinancialManagementCollegeofBusinessAdministrationChung-AngUniversitySpring2013- 1 -20102011201220132014Accounts receivable0150,000225,000190,0000Inventory75,000130,000130,00095,0000Accounts payable25,00050,00050,00035,0000ProjectNPVInvestment15,00010,00025,0005,000310,00090,000415,00060,000515,00075,00063,00015,0001. Briefly explain what some pitfalls of Internal Rate of Return (IRR) method are.2. Suppose you have the following investment opportunities, but only $90,000 available for investment. Which projects should you take?3. The following table tracks the main components of working capital over the life of a four-year project.Calculate net working capital and the cash inflows and outflows due to investment in working capital.4. Air conditioning for a college dormitory will cost $1.5 million to install and $200,000 per year to operate. The system should last 25 years. The real cost of capital is 5% and the college pays no taxes. What is the equivalent annual cost?Assignment III(Due on 6 / 3 / 13, before the class)