Jan Boothe is the CFO of the Laurelwood Sports Medicine Clinic. Boothe is trying to determine whether or not the clinic should move patient files and other items out of a spare room in the clinic and use the room for physiotherapy work. She has determined that it would require an investment of $286,000 for equipment and related costs of getting the room ready for use. Based on receipts being generated from other rooms in the clinic, Boothe estimates that the new room would generate a net cash inflow of $70,000 per year. The equipment purchased for the room would have a seven-year estimated useful life.

3-a. Although seven years is the average life for physiotherapy equipment, Boothe knows that due to changing technology this life can vary substantially. Compute the IRR to one decimal place if the life of the equipment were (a) five years and (b) nine years, rather than seven years. (Hint: Use Microsoft Excel to calculate the discount factor(s).) (Do not round intermediate calculations and round your final answers to the nearest whole number.)