Part 1) A new project has an investment of one million and it will generate a cash flow at the end of the first year of $632,000 and at the end of the second year $725,000. Calculate the IRR for this project.

Part 2) The revenues for a project are 1.2 million at the end of the first year and 2.6 millions at the end of the second year. If the investor is evaluating this project assuming a yield of 10% per year. How much is the present value (investment) of this project?

Part 3) A 5 years’ project is defined as it follows:

Revenues are $645,000 the first year and will increase 3% per year for the next 4 years.

Fixed cost are $52,000 and they will increase 5% the first 2 years and will remain constant for the following years.

Variable cost is assumed to be 8% of the Revenues.

The initial investment is $800,000

Fixed assets are priced at $250,000 and they are depreciated linearly for 5 years with a residual value of zero.

Taxes are 35%

Calculate:

Revenues per year

Variable Cost per year

Fixed Cost per year

EBIT per year.