1. A new hog investment requires an initial outlay of $130,000 and is expected to increase operating receipts by 87,000 but will also increase operating expenses by 23,000. The investment will be depreciated over 15 years and will have a $0 salvage value. The marginal tax rate is 30%. The investment will be analyzed over 7 years and the terminal value of the hog investment after 7 years will be $45,000. The pre-tax discount rate is 13.5%. What is the NPV?

Based on the previous question, what is the IRR?

Based on your previous answers, would you invest in this project? Why or why not?