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Initial investment $100,000,000 Year 1 $15,000,000 Year 2 $20,000,000 Year 3 $10,000,000 Year 4 $15,000,000 Year 5 $20,000,000 Year 6 $15,000,000 Year 7 $25,000,000 (a)

Initial investment $100,000,000

Year 1 $15,000,000

Year 2 $20,000,000

Year 3 $10,000,000

Year 4 $15,000,000

Year 5 $20,000,000

Year 6 $15,000,000

Year 7 $25,000,000

(a) What is the internal rate of return, assuming annual compounding?

(b) What is the internal rate of return, based on a semi-annual bond equivalent yield?

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