1. MartinCrane expects cash flows from a new project of $25,000 per year for the next 5 years. The project will require an investment of $40,000. Determine the NPV of the project if the required rate of return on such projects is 10%. Calculate the IRR.
2. Calculate the NPV of a project that requires an initial cash outlay of $500,000 and generates annual net cash flows of $50,000 for 10 years. Use a discount rate of 12%. Calculate the IRR.