Problem:
A firm is evaluating and investment that costs $90,000 and is expected to generate annual cash flows equal to $20,000 for the next 6 years.
Required
Question: If the firm's required rate of return is 10%, what is the net present value (NPV) of the project? What is the internal rate of return (IRR)? Should the project be purchased?
Note: Please explain comprehensively and give step by step solution.