Task1) An investment project offers cash inflows of $675 per year for eight years. What is project payback period when the initial cost is $1,850? What when the initial cost is $3,600? What when it is $5,500?

problem1. What is project payback period when the initial cost is $1,850?

problem2. What is project payback period when the initial cost is $3,600?

problem3. What is project payback period when the initial cost is $5,500?

Task2) A firm measures all of its projects by applying IRR rule. A project under consideration has the following cash flows:

Year                 Cash Flow

0                     –$27,700    
1                        11,700    
2                        14,700    
3                        10,700

problem1. If required return is 18 percent, what is IRR for this project?

problem2. Should firm accept following project?