Carl, an engineer working for GE, invested his bonus money each year in company stock. His bonus at the end of each year 1 through 6 has been

$5000. At the end of year 7, Carl received no bonus and he sold $9000 worth of stock to remodel his kitchen. In years 8 through 10, he again received a bonus and invested the $5000. Carl sold all the remaining stock for $50,000 immediately after the last investment at the end of year 10.

a. Determine the expected number of positive rate of return values.

b. Find the internal rate(s) of return.

c. Use hand solution and the MIRR spreadsheet function to determine the external rate of return using the modified rate of return approach with a borrowing rate of 8% and a reinvestment rate of 20% per year

d. Determine the external rate of return using the ROIC approach with a reinvestment rate of 20% per year. Apply both the net-investment procedure and spreadsheet functions to obtain the EROR.