Assume GHC found a project called BCC with the following cash flows.

	0	1	2	3	4	5
BCC	-120,000	50,000	40,000	30,000	20,000	10,000

a) calculate the IRR of this project.

b) Is project BCC worth undertaking by using the bond issue above to raise the needed capital?

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2. Assume GHC has just paid dividend on its common stock of $1.50 per share. Its dividends grow at an annual rate of 6%. GHCs stock price is $20 per share.

a) what is the expected rate of return on the stock?

b) if GHC wants to undertake the BCC project above by raising the needed capital by issuing its shares of stock, is it worth it?