After graduation from Harvard Extension, you decide to stay in the Cambridge area and start your own business. You think you see a couple of opportunities.

Knowing first-hand the pressure Harvard students are under, you consider opening a business that allows them to let off steam and get rid of their aggression: A paintball center right in The Square.

The cost of the project would be $150,000, payable up front, while revenues are expected to be $7,500 per year, forever.

6a. If the interest rate on comparable assets is 4%, is this project worthwhile? Provide an explanation and show your calculations.

6b. Find this projects internal rate of return (IRR). Provide an explanation and show your calculations.

6c. You are also considering a second business opportunity: Supplying fish, fresh from the bottom of the Charles River, to Harvard Dining Services, for the next three years in return for an up-front payment from them of $15,000. You figure it will cost you $5,000 a year in supplies to provide this culinary joy.

So, the revenue and costs of the project can be summarized as follows:

Immediate and only revenue:	$15,000
Costs in Year 1:	$ 5,000
Costs in Year 2:	$ 5,000
Costs in Year 3:	$ 5,000

What is the projects internal rate of return (IRR)? Provide an explanation and show your calculations.