5.) W. Dram, a consulting accountant, has been offered a retainer of $120,000 to provide services over the next 12 months to South Lansing Overseas Airways Inc. In return for this immediate single payment, South Lansing can access up to 16 hours of accounting services from Dram for each of the next 12 months. Dram's normal billable rate is $500 per hour for accounting services. a. If Dram's monthly cost of capital expressed as an effective annual rate (EAR) is 12%, compute the NPV of the retainer offer. Show the formulas you use, with values inserted. (5) b. Describe how the NPV changes if the EAR changes to less than 12%. (5) c. Estimate the internal rate of return of Drams retainer offer and discuss your finding briefly. Show the formula you use, with values inserted. (5) | d. Explain the number of potential IRRs that exist for this problem. Hint: make a graph. (5) 5.) W. Dram, a consulting accountant, has been offered a retainer of $120,000 to provide services over the next 12 months to South Lansing Overseas Airways Inc. In return for this immediate single payment, South Lansing can access up to 16 hours of accounting services from Dram for each of the next 12 months. Dram's normal billable rate is $500 per hour for accounting services. a. If Dram's monthly cost of capital expressed as an effective annual rate (EAR) is 12%, compute the NPV of the retainer offer. Show the formulas you use, with values inserted. (5) b. Describe how the NPV changes if the EAR changes to less than 12%. (5) c. Estimate the internal rate of return of Drams retainer offer and discuss your finding briefly. Show the formula you use, with values inserted. (5) | d. Explain the number of potential IRRs that exist for this problem. Hint: make a graph