"Problem $3-11$

$5\mathrm{.}88$

points

The Dallas Development Corporation is considering the purchase of an apartment project for $$100,000.$ They estimate that they will receive $$15,000$ at the end of each year for the next $10$ years. At the end of the $10$th year, the apartment project will be worth nothing.

Required:

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a$.$ If Dallas purchases the project, what will be its internal rate of return, compounded annually?

Note: Do not round intermediate calculations and round your final answer to $2$ decimal places.

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b$.$ If the company insists on an $8$ percent return compounded annually on its investment, is this a good investment?

References

a$.$ Internal rate of return

b$.$ Is this a good investment?