9. You are evaluating a short term transaction, acquiring a public company implementing several business enhancements before attempting to exit three years later. All numbers are in thousands. Initial equity investment would be $500 and the remaining required capital would be borrowed. Free cash flows to equity (after debt service, taxes, capex, etc.) for years 1 through 3 from the business would be $50, $60, and $80, respectively. The cash flow from sale after paying off the debt, realized in year 3 would be $550. Calculate the IRR of this investment.

a. 15.3% b. 13.5%

C. 11.9%

d. 10.7%

10. For the prior question, using a discount rate of 12% what is the NPV of the investment? a. $77 b. $22 C. $(14) d. $41