2. Time: Investment A: Investment B: Year 0 Year 1 $300,000 -$1.5 million -$1.3 million $500,000 Year 2 Year 3 Year 4 Year 5 $300,000 $300,000 $500,000 $500,000 $400,000 $300,000 $200,000 $100,000 Discount Rate 8% 7% An investor is considering the two investments shown above. Please calculate the NPV and IRR for both A and B. And what is the crossover point here?

Assume that at the end of year 0 you invested $100,000 in an investment fund. Since then the annual returns earned by this fund have been as follows: End of Year 1 2 3 Observed Return A. $87,319. B. $90,973. C. $109,683. D. $114,015. 15.00% -40.00% 35.00% It is now the end of year 3 and you expect to earn the same average annual return that you earned over the three-year period above. Based on this expectation, the value of your original $100,000 investment at the end of year 4 will be closest to: