Scenario 5. Assuming a 12% interest rate, how much would Sarah have to invest now to be able to withdraw $14,000 at the end of every year for the next nine years? (Round your answer to the nearest whole dollar.)

Present value

= $

Scenario 6. Earl is considering a capital investment that costs $515,000 and will provide net cash inflows for three years. Using a hurdle rate of 10%, find the NPV of the investment. (Round your answer to the nearest whole dollar. Use parentheses or a minus sign to represent a negative NPV.)

Net Present Value (NPV)

= $

Scenario 7. What is the IRR of the capital investment described in Question 6?

The IRR is the interest rate at which the investment NPV = 0.

We tried 10% in question 6, now we'll try 12% and calculate the NPV. (Round your answer to the nearest whole dollar. Use parentheses or a minus sign to represent a negative NPV.)

Net Present Value (NPV)

= $

The IRR for the project is