Question #7

Kate Berry will not invest unless she can earn at least a(n) 8% return. She is evaluating an investment opportunity that requires an initial outlay of $2,500 and promises to return $5,000 in 8 years. a. Use present value techniques to estimate the IRR on this investment. b. On the basis of your finding in part a, should Kate make the proposed investment? Explain. a. The yield on this investment is \%. (Enter as a percentage and round to two decimal places.)