Project is expected to produce annual cash flows

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1. Gomi Waste Disposal is evaluating a project that would cost 70,300 dollars today. The project is expected to produce annual cash flows of 6,260 dollars forever with the first annual cash flow expected in 1 year. The NPV of the project is -18,904 dollars. What is the cost of capital of the project? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

2. Fairfax Pizza is evaluating a project that would cost 7,744 dollars today. The project is expected to have the following other cash flows: 2,164 dollars in 1 year, 2,049 dollars in 3 years, and 6,577 dollars in 4 years. The NPV of the project is -81. What is the internal rate of return for the project? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Reference no: EM131891528

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