Problem: Duron Company is considering a project requiring $1 million initial investment.
Expected cash inflows will be:
- $25,000 in the first year
- $100,000 in the second year
- $200,000 per year for the next six years.
Q1. Calculate the project's IRR and the NPV assuming an 8% cost of capitol.
Q2. How much would each of the last six payments have to be to make the project's NPV $100,000?