1. Sports Manufacturing needs capital for expansion. It borrows $1,000,000 from Venture Bank for three years at 6% nominal interest convertible quarterly, and $500,000 for five years from a private investor at a 5% effective discount rate. At the end of two years, Sports Manufacturing makes a $200,000 three-year loan to its supplier of titanium (for baseball bats) at 7% annual effective interest. What annual internal rate of return should Sports Manufacturing report for the combined cashflows over the five-year period?