1. A company is thinking about investing $1,000 in a new factory. According to budget analysis, the factory will generate the following cash flows:
Year1 $200
Year2 $600
Year3 $800
Year4 $200
The company requires that its projects return 12%(perhaps because it pays 8% on its bonds,and requires a profit of 4%). Should the company invest in the new factory?

2. Determine the internal rate of return for a project that cost $78,000 and would yield after tax cash flows of $12,000 the first year,$14,000 the second year,$17,000 the third year.$19,000 the fourth year,$23,000 the fifth year and $29,000 the sixth year.

3. Determine the Payback Period(in years) for a project that cost $120,000 and would yield after tax cash flows of $20,000 the first year,$22,000 the second year,$25,000 the third year.$29,000 the fourth year,$23,000 the fifth year and $27,000 the sixth year.