Bill Clinton reportedly was paid

$11.0

million to write his book My

Life.

The book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn

$8.6

million per year (paid at the end of the year) speaking instead of writing. If his cost of capital is

9.2%

per year, then the NPV of agreeing to write the book (ignoring any royalty payments) is

$10,691,773.

How many IRRs are there in this problem? Does the IRR rule give the right answer in this case?

(Note:

Consider the upfront payment as a positive cash flow and the opportunity cost of missed speaking fees as negative cash flows.)

Question content area bottom

Part 1

The IRR is

enter your response here%.

(Round to two decimal places.)