1. You want to start an organic garlic farm. The farm costs $300,000, to be paid in full immediately. Year 1 cash flows will be $36,000, and grow at 6% a year into year 5 when you decide to sell the farm at the end of the year for $360,000. Assuming these estimates are all correct, what is the IRR of the garlic farm investment? Round to the tenth of a percent (eg 5.6%=5.6). [Hint: You'll want to solve this in Excel using Goal Seek] please write down the function.

2. Your niece, Sally, is a lemonade stand mogul. Her lemonade stand has been the most successful in the neighborhood for the last 5 years. Shes ready to get out. She wants to sell her lemonade stand to her younger sister, Rachel. Rachel contracts you, the business major, to advise her in the transaction. The lemonade stand has no valuable assets, so its value is derived solely from the ability to generate cash flows. The lemonade stand had cash flow last year (year 0) of $200. Cash flow has been growing steadily, and is expected to continue growing steadily for the foreseeable future (aka, infinitely), at 10% per year. The applicable discount rate is 15%. However, Rachel doesnt have much cash on hand and will have to finance the purchase of the lemonade stand as a 5-year annuity to Sally. How much will Rachel have to pay Sally per year over the next five years to take over the lemonade stand? Round to nearest cent.