Problem
1. A project requires an initial investment of $50 000. It produces a return of $40 000 at the end of year 1 and $30 000 at the end of year 2. Find the exact value of the internal rate of return.
2. An annuity pays out $a per year in perpetuity. If the interest rate is r% compounded annually, show that the present value of the whole annuity is 100a/r.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.