Q1) A project has cash flows of –$100, +$55, and +$60.50 in consecutive years starting from right now. What is the IRR of the Project? The table below shows the un-discounted cash flows of 5 projects...

Question 1
Out Flow = 100
Inflow = 5 in year 1 and 60.50 in year 2
    Year
    0
    1
    2
    CF
    -100
    55
    60.5
    IRR =
    10.00%
     
     
NPV Working
    Project
    Year 0
    Year 1
    Year 2
    Year 3
    Year 4
    NPV
    A
    -1,000
    300
    500
    500
    600
     
    B
    -1,000
    150
    200
    1,000
    1,200
     
    C
    -2,000
    1,900
    200
    0
    0
     
    D
    -200
    300
    0
    0
    0
     
    E
    -200
    300
    0
    -100
    0
     
     
     
     
     
     
     
     
    PVIF @ 9%
    1
     0.917
     0.842
     0.772
     0.708
     
    PV A
    -1,000.00
    275.23
    420.84
    386.09
    425.06
        507.22
    PV B
    -1,000.00
    137.61
    168.34
    772.18
    850.11
        928.24
    PV C
    -2,000.00
    1,743.12
    168.34
    0.00
    0.00
         (88.54)
    PV D
    -200.00
    275.23
    0.00
    0.00
    0.00
          75.23
    PV E
    -200.00
    275.23
    0.00
    -77.22
    0.00
           (1.99)
Question 2
From the above calculations made, we can see that NPV of project B is highest at 924.24. Therefore if the projects are mutually exclusive, then project B should be selected.
Question 3
NPV of project B = 928.24
Question 4
If the projects were not mutually exclusive and there was unlimited money, projects A, B and D would be accepted as they have positive NPV.
Question 5
Project D has the highest IRR of 37.61%
Question 6
    Project
    Initial Investment (A)
    PV OF Cash flows (B)
    Profitability Index (B/A)
    A
    1,000
    1,507.22
     1.51
    B
    1,000
    1,928.24
     1.93...