9:21 Drive ..ILTE O (b) What is the IRR? Should you invest? (5 marks] 7.126% 8% no (c) What is the NPV? Should you invest? (2 marks] -10181=213851.14 1. You have decided to purchase an existing business that publishes the computer magazine called Nerd. You can buy the business for $200,000. The expenses are estimated to be $150,000/year for the first 2 years and $100,000/ year for the next 2 years. Revenue is expected to be $150,000 per year. You estimate that you can sell the business at the end of 4 years for the original purchase price. You want to earn at least 8% per year on your investment. All expenses are assumed to occur at the beginning of the year and all revenue at the end of the year. (a) What is the payback period for this investment? [3 marks] 3.71 years (b) What is the IRR? Should you invest? [5 marks] 7.126% 8% no