Use the following information for the next three questions:

Goofy has just offered you the opportunity to buy into one of the miniature golf courses he has just completed at Disney World. To lease the course you must make a single, up-front payment of $200,000 cash. The course is expected to generate revenues of $75,000 for the next ten years, at which time your lease expires and the course reverts to Goofy. At the end of the lease, the golfing equipment is yours and can be sold at an estimated salvage value of $15,000. Cash operating expenses are estimated to be $40,000 per year, and depreciation will be $3,000 per year. Your required rate of return is 12%

1. What is the net present value of this investment opportunity?
   1. $2,580
   2. $12,750
   3. $197,750
   4. $200,000

2. What is the payback period for this investment opportunity?
   1. 2.67 years
   2. 5.29 years
   3. 5.71 years
   4. 6.25 years

3. What is the simple rate of return for this investment opportunity?
   1. 37.5%
   2. 17.5%
   3. 17.3%
   4. 16.0%