Suppose the current one-year rate of interest is 3%. The forecast for future one-year interest rates calls for the rate to rise by 1% per year (i.e., the one-year rate next year will be 4%, the year after it will be 5%, and so on).

a. Calculate and plot the six year yield curve.

b. Once you have constructed the yield curve, use the information it provides to calculate the NPV of a project with the following cash flows:

Year	0	1	2	3	4	5	6
CF	-$5,000	$1,000	$1,500	$1,500	$2,000	$2,000	$2,500

c. What single discount rate can you use to obtain the same NPV?