Van Auken Inc A)payback = 2

Multiple Choice

Van Auken Inc.is considering a project that has the following cash flows:The company's WACC is 10%.What are the project's payback,IRR,and NPV?
$\begin{array}{ll} \underline {\text { Year } }& \underline {\text { Cash Flow } }\\0 & -\$ 1,000 \\1 & \$ 400 \\2 & \$ 300 \\3 & \$ 500 \\4 & \$ 400\end{array}$

A) payback = 2.4, IRR = 10.00%, NPV = $600
B) payback = 2.4, IRR = 21.22%, NPV = $260
C) payback = 2.6, IRR = 21.22%, NPV = $300
D) payback = 2.6, IRR = 21.22%, NPV = $260