Lincoln Corporation expanded recently by investing $100,000 in new business assets. This has increased annual operating cash inflows by $50,500 and annual operating cash outflows by $30,200.

These increases are expected for a total of six years. At that time, these new assets will be obsolete and worthless.

a. If the corporation requires a return of 8% on its investments, was this a wise investment decision? Show calculations to prove your answer.

b. If you decide that the company has not met its investment goals, what minimum annual net cash inflow over the six-year period would give the desired rate of return?

c. Assuming that operating cash outflows do not change, what is the necessary increase in operating cash inflows that is needed to earn an 8% return?