Year Project#1 Project#2 Project#3

0 ($30.000) ($32,000) ($35,000)

1 $11,000 $15,000 $11,000

2 $11,000 $14,000 $11,000

3 $11,000 $11,000 $11,000

4 $11,000 $2,000 $11,000

5 $11,000 $500 $11,000

Scenario NPV Rate

1 5%

2 5.5%

3 6%

Using the data in the tables above, answer the following questions:

• Calculate the NPV for each project using each scenario’s NPV rate. Show your work.

• Calculate the pay-back period for each project. Show your work.

• Calculate the IRR for each project. Show your work.

• Which project would the company select using the NPV method in scenario 1? Explain your answer.

• Which project would the company select using the NPV method in scenario 2? Explain your answer.

• Which project would the company select using the NPV method in scenario 3? Explain your answer.

• Which project would the company select using the pay-back period? Explain your answer.

• Which project would the company select using the IRR method? Explain your answer.