3.A manufacturer of backpacks plans to introduce a new line. Equipment and production costs will be incurred immediately and will total $7,272,727. The company expects to earn a profit of $20 per backpack, and sales are estimated to be 100,000 in the first year (assume that the cash flow comes in at the end of the year). Sales are then expected to grow by 10% per year in each of the next three years (in year 2, year 3, and year 4) but the price is expected to remain at $20 throughout. What is the internal rate of return of this project?

____________%

Place your answer in percentage form with no percentage sign. That is, if your answer is four point eight eight percent, you should enter that value as 4.88.

Should the company produce the backpacks if the required rate of return is 12%?

____________(Yes or No)

You must get both parts correct to receive credit.

4.A cookie company wants to expand its retail operations. Based on a preliminary study, 10 stores are feasible in various parts of the country. The cash flow at each store is expected to be $150per year for five consecutive years. Each store requires an immediate investment of $550to set up operations. Assuming a required rate of return6%, what is the NPV of each store?

$___________

Place your answer in dollars and cents, without any comma or dollar sign. Work your analysis out using at least four decimal places of accuracy.