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14 Problem 3-18 2 points An investment is expected to produce the following annual year-end cash flows: Year 1 Year 2 Year 3 Year 4

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14 Problem 3-18 2 points An investment is expected to produce the following annual year-end cash flows: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $ 5,000.00 $ 1,116.00 $.00 $ 5,220.00 $ 6,220.00 $ 1,248.54 eBook The investment will cost $13,600 today. Print Required: References a. Will this investment be profitable? b. What will be the IRR (compounded annually on this investment? c. Show how much of each year's cash flow is recovery of the $13,600 investment and how much of the cash flow is return on investment. (Hint: See Exhibit 3-13 and Concept Box 3.2.)

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