1. Given the following set of cash flows, for a capital budgeting project, what is theInternal Rate of Return (IRR)?

Initial Investment (I) = $20,000

CF₁= $5,500

CF₂= $6,125

CF₃= $8,625

CF₄= $6,750

2.Digital Systems, Inc. just paid a dividend ofD₀= $3.25per share on its stock.The dividends are expected to grow at a constant rate ofg = 3 percentper year indefinitely.If investors require a return ofK_C/S= 13 percenton the company's stock, what is the current price,P₀?