1. a firm has 500,000 shares outstanding at a price of $100/share so its market value is (500k)($100)=$50M. The firm's investment projects are financed by debt only. Currently, the firm is considering an investment project that will cost $1,000,000 and generate cash flows of $500,000, $400,000, $400,000, and $150,000 in years 1 through 4

a. (i) If the current required rate of return is 20%, find the present value of the cash flows. Note: this is actually NPV.

(ii) Based on your answer in part (i), should the firm invest in this project?