A local bank is running the following advertisement in the newspaper: "For just $1000 we will pay you $60 forever!" The fine print in the ad says that for a $1000 deposit, the bank will pay $60 every year in perpetuity, starting one year after the deposit is made. What interest rate is the bank advertising (what is the IRR on this investment)? 6. You are considering investing in a gold mine in South Africa. Gold in South Africa is buried very deep, so the mine will require an initial investment of $250 million. Once this investment is made, the mine is expected to produce revenues of $30 million per year for the next 20 years. It will cost $10 million per year to operate the mine. After 20 years, the gold will be depleted. The mine must then be stabilized on an ongoing basis, which will cost $5 million per year in perpetuity. Plot the NPV of this project as a function of the discount rate. Calculate the IRR of this investment. 7