You are planning to open a business. The initial cost would be $350,000, which includes buying a building, buying supplies, etc. Assume that the current annual interest rate is 5.5%. Your research indicates that the returns for the next three (3) years are: Year 1: $105,000 Year 2: $125,000 Year 3: $160,000

(a) What is the net present value of this project?

(b) Should you open the business? Why or why not?

(c) Which of the following describes the internal rate of return for business? Briefly justify your choice. (i) IRR < 5.5% (ii) IRR = 5.5% (iii) IRR > 5.5%