In Year 4, the project will provide a net negative cash flow of $5,000,000 due to anticipated expansion of and repairs to the facility. During Years 5 through 10, the project will provide cash inflows of $2 million per year.

a. Calculate the project’s NPV and IRR where the discount rate is 12 percent. Is the project a worthwhile investment based on these two measures? Why or why not?

b. Calculate the project’s MIRR. Is the project a worthwhile investment based on this measure? Why or why not?