Red Hawk Property Partners ( RHPP ) is evaluating a proposal to purchase two idle manufacturing facilities located near Burbank, Oklahoma. The combined cost of purchasing these properties would be $20 million. Each facility has 3000 amps of 480 volt 3 phase electrical power and close proximity to the air cargo facilities at the Osage regional airport. However, an immediate expenditure of $8 million dollars will be required to begin the installation of cleanrooms in each facility and to bring the electrical wiring into compliance with local building codes. The total time required to upgrade and complete the sales of the two facilities is four years. The CFO for RHPP projects that at the end of two years the first facility can be sold for $25 million. The second facility, whose configuration is somewhat less desirable, will take four years to sell, with an expected selling price of $15 million. Revisions to the tax code intended to stimulate the economy exempt all profits related to renovation and sale of idle manufacturing capacity from all State and Federal taxes. Assuming the date 2 project cash flows can be reinvested at an annual rate of 2.5 percent: a. determine the internal rate of return for the project. (6 points) b. determine the reinvested rate of return for the project. (6 points) c. concisely explain why the reinvested rate of return is greater than or less than the internal rate of return for the project (no points will be awarded for a simple comparison of the internal rate of return and the reinvested rate of return).