You are considering purchasing a Michael Faraday action figure today. You would have to

pay $$40$ today, and another $$90$ two years later $($ie in year $2).$ However, you anticipate you

can sell it for $$120$ one year from now $($ie in year $1).$ Your cost of capital $(k)$ and minimum

acceptable rate of return $($MARR$)$ is $25\%.$ In answering the following, be sure to show your

work $-$ a software derived answer $($eg Excel$)$ is not acceptable.

a$.$ Find any positive breakeven interest rates on your investment. $(4)$

b$.$ Determine whether this is a pure or mixed investment. $(4)$

c$.$ Use the internal rate of return method to determine if you should buy the Michael

Faraday action figure. You may assume the project balance in year $1$ is positive. $(8)$

d$.$ You find that there is also a James Clerk Maxwell action figure available for sale, too.

You would have to pay $$50$ today, and another $$72$ two years later $($ie in year $2).$

However, you anticipate you can sell it for $$120$ one year from now $($ie in year $1).$

Using the Internal Rate of Return $($IRR$)$ approach, determine whether it is more

profitable to buy the Michael Faraday action figure or the James Clerk Maxwell

action figure. $($Note: These are mutually exclusive investments$).(8)$