Bolman corporation is considering an expansion project that will begin next year ( time 0). Bolman cost of capital is 12%. Reinvestment rate is 15%. The initial cost of the project will be $250,000 and it is expected to generate the following cash flows over its five-year life:

year $

1 $40,000

2 $60,000

3 $90,000

4 $90,000

5 $90,000

1. What is the payback period for the expansion project?

a. 3.67 years

b. 4.00 years

c. 4.25 years

d. 4.67 years

e. 5.00 years

2. what is the discounted payback period for the expansion project?

a. 3.50 years

b. 4.00 years

c. 4.88 years

d. 5.0 years

e. 5.83 years

3. What is the net present value (NPV) of for the expansion project?

a. ($45,197)

b. $ 5,871

c. $ 13,784

d. $ 25,726

e. $120,000

4. What is the Modified Internal Rate of Return ( MIRR ) for the expansion project?

a. 10.63%

b. 12.96%

c. 13.64%

d. 14.00%

e. 14.25%

5. What is the Modified Net Present Value ( MNPV ) for the expansion project?

a. $268,811

b. $119,025

c. $25,726

d. $18,811

e. $5,871