Given the following cash flows, assume that that cost of capital is 8%.

Year Cash flow

0 (-) $225,000

1 $ 30,000

2 $ 75,000

3 $ 75,000

4 $ 50,000

5 $ 50,000

6 $ 50,000

.Compute the payback period:

		a) 3.50
		b) 3.67
		c) 3.75
		d) 3.90
		e) 4.00

About how many years will it take to grow your 401k balance by 400% assuming 8% annual returns for your portfolio? (Hint: Think CAREFULLY about TVM, and how money grows at (1+i) each year, where i = the rate of return. Thus, a 100% return doubles your money, 200% triples, etc.)

		a) 17
		b) 18
		c) 19
		d) 20
		e) 21