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QUESTION 4 Consider the following cash flows on two projects. If the company uses the rule to choose projects, which of the projects Project A or Project 3) will rank highest Project A Project B Time 0 -10,000 5,000 Time 1 5.000 3.000 Time 25,000 3.000 Time 3 5,000 3.000 Project A Project B Both are the same Neither (Can't compute) QUESTIONS Mary is in contract negotiations with a publishing house for her new novel. She has two options. She may be paid $50.000 up front and receive royalties that are expected to total $14,000 at the end of each of the next 5 years. Alternatively, she can receive 5100000 up front and no royalties. Which of the following investment rules would indicate that she should take the former deal, given a discount rate of 947 Rule The Net Present Value rule, Rute : The Payback Rule with a payback period of 2 years. HINT What are the inflows and outflows. READ THE QUESTION Rulet None Rule 1 RuleI and it QUESTION 6 A company is thinking about marketing a new product. Up-front costs to market and develop the product are 512.29 Min. The product is expected to generate proto of $1.53 million per year for 25 years. The company will have to provide product support expected to cost 5222317 per year in perpetuity Furthermore, the company to invest $49,628 per year for 11 years for renovations on the product. This investing would start at the end of year. Assure a profits and especies occur at the end of the year. Calculate the NPV of this project if the interest rate is 767

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