7. An insurance firm agrees to pay you $3,310 at the end of 20 years if you pay premiums of $100 per year at the end of each year for 20 years. Find the internal rate of return to the nearest whole percentage point.

a. 9%

b. 7%

c. 5%

d. 3%

e. 11%

8. Oak Furnishings is considering a project that has an up-front cost and a series of positive cash flows. The project's estimated cash flows are summarized below:

Project

Year Cash Flow

0 ?

1 $500 million

2 300 million

3 400 million

4 600 million

The project has a regular payback of 2.25 years. What is the project's internal rate of return (IRR)?

a. 23.1%

b. 143.9%

c. 17.7%

d. 33.5%

e. 41.0%