Hershiser has been researching different methods of management leadership that are designed to increase employee motivation and performance. If he pursues a new leadership style, it will require an investment of $165,000 to take the training. A new executive assistant will be hired at a cost of $55,000 annually with expected raises of 5% each year. The techniques and tactics from the style are expected to have an impact on employees for five years before needing to be refreshed and updated with more modern techniques. Increased motivation and performance will produce net profits of $100,000 in the first year, rising by 10% in each subsequent year. (Show your calculations)

a. Calculate the net present value using a cost of capital of 10%. Should Hershiser take the management leadership course?

b. What is the maximum cost of capital that will still produce a the decision to proceed with the course?