A firm is considering investing in a project. The firm has a WACC of 11.75%. This project is expected to yield positive cash flows of $10,000 in years 1 and 2, followed by positive cash flows of $20,000 in years 3-5. The initial cost of the project is $40,000 today.
1. What is the Return on Investment (ROI) for this project?
2. What is the Internal Rate of Return (IRR) for this project?