1 matthewrsquos construction is considering a project that, Ask an Expert

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1. Matthew’s Construction is considering a project that will cost $1.2 million to start. The project is expected to produce cash flows starting in year 2 of $269,000 a year for the following six years. What is the internal rate of return on this project?

a. 4.09% b. 5.62% c. 6.97% d. 8.32% e. None of the above

2. Peter is considering a project with an initial cost of $42,000 and annual cash inflows of $9,100 a year for six years. What discount rate, when applied to this project, will produce a profitability index of 1.0?

a. 7.00% b. 7.65% c. 7.88% d. 8.05% e. None of the above

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92081446

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