An immediate outlay of $45,000 is required to develop and introduce a new product. Anticipated net returns from the marketing of the product are expected to be $12,500 per year for the next 10 years.

a. What is the rate of return (IRR) on the investment (express to the nearest 10^th of a percent)? ___________

b. What is the projects net present value at 16%? _____________

c. Should the project be pursued if the company requires a return of 16%? _________

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