John borrows $100,000from the bank at 8%interest and uses the capital to start an internet marketing company.Based on his forecast of future profits over five years, he calculates his internal rate of return at 10%.Inflation is also running at 2%annually.Is this a good investment?

1Yes,John is earning a higher Internal Rate of Return that the loan.

2Yes,John's Internal Rate of Return with Inflation is returning12%,and his loan is 8%.

3No, after inflation John is just breaking even and therefore not earning a profit.

4There's not enough information to answer this question.