3.

a)

What is the discounted payback period (in annual terms) of the following cashflow stream? The rate is 4.4%.

Year 1: $-1,135

Year 4: $321

Year 6: $1,839

Year 11: $-116

Year 16: $-846

Year 20: $66

b) What is the IRR for the following cash flow stream? (Blackboard will yell at you about the units (%), when tested it looks like adding the units or leaving the units off of this problem makes no difference in the grading. Do NOT answer in decimal form!) Year 0: $-1543 --- Year 1: $2318 --- Year 8: $2977 --- Year 11: $2611