1. Because of its age, your car costs $6,000annually in maintenance expense.You could replace it with a newer vehicle costing $10,000that would be expected to have a life of4years.If your opportunity cost of capital is5%, by how much must maintenance expense decrease on the new vehicle to justify its purchase?
2. Mountain Ridge Properties is evaluating a real estate investment of Ocean Park Estates. Management plans to buy the property today and sell it 15 years from today. The initial cost of the property is $17 million and the expected sale price is $35 million. What is the IRR of the investment? Enter your answer as a percentage and rounded to 2 DECIMAL PLACES.