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2. (10 points) You are considering a $25,000, 3-year investment and feel that a 12 percent rate of return is reasonable given the nature of

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2. (10 points) You are considering a $25,000, 3-year investment and feel that a 12 percent rate of return is reasonable given the nature of the risks involved. You feel that you will receive at least $100 in the first year, $36,000 in the second year, and potentially could see a cash outflow of $5,000 in the third year. a. Does this investment make sense, and if so, why? b. What problem you can expect in applying the IRR rule to this decision? Explain your answer in a few sentences

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