8.Dismayed at the lack of Dunkin Donuts shops in the Boston area, you decide to open a franchise in Harvard Square. You will need to pay $650,000 for the shop up front, and expect profits to be $40,000 per year forever. You also intend to own the store indefinitely. If you don't buy the shop, you will leave the $650,000 in a mutual fund earning 4.5%.

Find the IRR (rounded to two decimal places) of the donut shop, and, based on the number you calculate, explain whether you should buy it. Show all of your calculations.