As a separate project (Project P), the firm is considering sponsoring a pavilion at the upcoming World’s Fair. The pavilion would cost $800,000, and it is expected to result in $5 million of incremental cash inflows during its 1 year of operation. However, it would then take another year, and $5 million of costs, to demolish the site and return it to its original condition. Thus, Project P’s expected net cash flows look like this (in millions of dollars):

The project is estimated to be of average risk, so its WACC is 10%. What is Project P’s NPV? What is its IRR? Its MIRR?

Transcribed Image Text:

2 + -0.8 5.0 -5.0