# Consider the following cash flows: Year Cash...

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1. Consider the following cash flows: Year Cash Flow 0 –\$6,600 1 1,900 2 3,900 3 1,700 4 1,400 What is the payback period for the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
2. You’re trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of \$20.6 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of \$1,915,000, \$2,195,000, \$2,134,000, and \$1,376,000 over these four years, what is the project’s average accounting return (AAR)? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) %
3. For the given cash flows, suppose the firm uses the NPV decision rule. Year Cash Flow 0 –\$161,000 1 55,000 2 84,000 3 68,000
At a required return of 9 percent, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
At a required return of 21 percent, what is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
4. A project that provides annual cash flows of \$2,500 for nine years costs \$10,300 today. At a required return of 10 percent, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
At a required return of 26 percent, what is the NPV of the project? (A negative answer
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