1. You are considering purchasing a warehouse. The cost to purchase the warehouse is $500,000. Renting the equivalent space costs $20,000 per year. If the annual interest rate is 6%, at what rate must rental cost increase each year to make the cost of renting comparable to purchasing?
2. You have an investment opportunity that requires an initial investment of $5000 today and will pay $6000 in one year. What is the IRR of this opportunity?