67) a) You pay $200 today and receive $600 in 20 years. (Note: Some investors refer to this three-fold increase as a 3x investment. i.e. 600/200 = 3 i.e. you tripled your initial investment). You pay $200 today and receive $600 in 20 years. (Note: Some investors refer to this three-fold increase as a 3x investment. i.e. 600/200 = 3 i.e. you tripled your initial investment).

b) Using your cash flow timeline for Part A, assume that the effective annual expected return, E[r], (the rate that you should earn, if you were fairly compensated for the risk) is 6%. Is this a good investment?

Answer Options:

a) Yes. (its a good investment).

b) No. (its a bad investment).

c) Its a neither a good nor a bad investment. Its a fair investment.

d) Indeterminate (i.e. impossible to determine give the available information).

c)Using your IRR answer from Part A, and an E[r] of 8% EAR, compute the Percent Bonus.Be careful with the sign (positive or negative). Visually show the Percent Bonus on your graph, then enter your answer as a percent, not as a decimal.