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Q3a)A businessman wants to buy a truck. The dealer offers to sell the truck for either (i) $130,000 now, or (i) five yearly payments of $35,000 at the end of each year. If the businessman does not have enough cash but can get a loan from the bank at 12% interest rate, which offer should he choose from the dealer? Group of answer choices Option (i) because the dealer charges 10.80% Option (i) because the dealer charges 13.12% Option (i) because the dealer charges 13.12% Option (ii) because the dealer charges 13.12% Option (ii) because the dealer charges 10.80% Q3b)Star Mining Co, is considering reopening one of its old silver mines. New extraction techniques will allow the company to mine a one-year production of silver worth $3 million in after-tax profit at the end of year 1. However, in the second year of operation, the cost of retuming the mine to the natural condition mandated by law will cost $1 million at the end of year 2 . Opening and preparing the mine will cost $1 million at time t=0. The discount rate is 8%. The NPV of the reopened mins is . (Input your answers in millions without the S sign and rounded to two decimal points.) The IRR of the reopened mine is - (Input your answer in percent but without the percent sign and rounded to two decimal points.)

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