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profitablity index

Capital Budgeting Practice Problems
a. Consider the project with the following expected cash flows:

Year Cash flow
0 - $550,000
1 $ 90,000
2 $100,000
3 $450,000

If the discount rate is 0%, what is the project's net present value?
If the discount rate is 4%, what is the project's net present value?
If the discount rate is 8%, what is the project's net present value?
If the discount rate is 10%, what is the project's net present value?
What is this project's internal rate of return?

b. Consider a project with the expected cash flows:

Year Cash flow
0 - $315,000
1 + 71,000
2 + 150,000
3 + $150,000

What is this project's internal rate of return?
If the discount rate is 0%, what is this project's net present value?
If the discount rate is 4%, what is this project's net present value?

If the discount rate is 8%, what is this project's net present value?

If the discount rate is 12%, what is this project's net present value?

I think by using the present value formulas for each but not sure how to get the entire group years this in refreance to both questions?

c. A project requiring a $3.3 million investment has a profitability index of 0.96. What is its net present value?

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Help is given with the profitablity index.

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