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Frost Company forecasts the launch of its new product with the following projected cash flows for each year. Initial investment in the project (including working capital) is $50,000. No salvage value at the end of the project. Year Cash Flow Amount 1 $22,500 2 $21,000 3 $12,000 4 $8,500 1. Using an opportunity cost of capital of 12%, what is the Net Present Value? [Excel Formula = NPV] [Hint: NPV of Cash Flows – Initial Investment = Net Present Value] A. $50,773.62 B. $ 690.74 C. $ 773.62 D. $50,000.00 2. What would be the project IRR using the above data? [EXCEL Formula = IRR] A. 12.00% B. 12.87% C. 6.23% D. 11.51%

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