You have been assigned to a project to determine if a new investment should be made. your company uses a capital structure of 30% debt and 70% equity. the debt currently pays 8.5% interest; the required return of the equity is 15%. the investment will be analyzed using a ten-year cash flow analysis. here are the financial details: year expected sales cost of goods (%of sales) r&d expense 1 $1,000,000 40% $1,000,000 2 2,000,000 30% 500,000 3 3,000,000 25% 200,000 4 3,600,000 20% 200,000 5 4,000,000 20% 200,000 6 4,500,000 20% 200,000 7 5,000,000 20% 200,000 8 5,000,000 22% 100,000 9 4,000,000 24% 100,000 10 2,000,000 25% 50,000 sales and marketing expenses are estimated to be 15% of sales. the corporate tax rate is 40% . the investment will be $4,000,000 at the start of the program (year 0). for tax purposes, the investment will be amortized over 10 years. administration costs are 4% of sales. at the end of the program, the equipment will have a scrap value of $250,000. a total of $2,500,000 of r&d expenses for this program occurred before the investment decision is made. the hurdle rate for the project is 1% over the company’s cost of capital. calculate the IRR of this project and determine if it exceeds the hurdle rate or not.