Question 11 (15 points) An angel investor is considering two projects ABC and XYZ. If she chooses project ABC now, then the benefits in both period 1 (now) and period 2 are $100 each. If instead, she chooses project XYZ, then the benefits in period 1 (now) is $0, but the benefits in period 2 are $210. (15 points) a) There is no cost for either of these projects (only her time is needed and she doesn't want to count it). In one interesting case, she finds that both ABC and XYZ have the same net present values (NPV). What is the interest rate that will equate the two NPVs? Recall that the present value (PV) of a future benefit or cost is determined by: PV = (FV:/(1+r)'), where y is the market interest rate. (5 points) b) Now, the benefits and costs in part a) still hold, but she finds out that the banks are announcing an interest rate of 20%. Also, assume that if she makes an investment of $50 in period 2. then ABC guarantees another $100 benefits in period 3. Likewise, if she makes an investment of $50 in period 1 (now), then the project XYZ guarantees another $100 benefits in period 3. What are the NPV of the two projects? Which project has higher NPV? (10 points) DELL