A third-year college friend of yours opened Mike’s Bike Repair Shop when he was a freshmen working on a sociology degree. He shared his NCF figures for the 3 years, including the $17,000 amount that it took to get started in business.

(a) Determine the number of possible rate of return values.

(b) Find all i* values between −50% and 110% by plotting PW versus i* for your friend. (Use 20% increments.)

Year ................................... Net Cash Flow, $
0 ......................................... −17,000
1 ........................................... 20,000
2 ........................................... −5,000
3 .............................................. 8000