1. The maintenance costs of a piece of equipment are expected to be $1,250 at the end of the first year and expected to increase by $250 each year for the following 7 years. Assuming an interest rate of 6%, approximately how much should be set aside now to pay for the maintenance?

a. $10,500

b. $12,720

c. $15,430

d. $33,000

2.

The internal rate of return of the following investment is in what range?

Year	0	1	2	3	4	5
Cash Flow	-2500	500	550	600	650	700

Less than 6%

Between 6% and 8%

Between 8% and 10%

Greater than 10%