The next two questions concern a firm's possible investment in a training program.
The immediate cost would be $2,000, but it would enhance the firm's profits by
$4,000 over the next two years: the firm's profits would increase by $1,000 in the
first year (one year after the initial cost) and by $3,000 in the second year.
Question 12 (1 point)
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If the firm's opportunity cost of funds is 8%, then what is the present value of the
project, to the firm, to the nearest dollar? $
Question 13 (1 point)
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What is the internal rate of return for this project, to the nearest percent? (For this
problem, unlike most problems that ask you to find the IRR, you can find an exact
answer algebraically.)
%.
