1. A project has an upfront capital cost of $1 million. It produces returns of $150,000 per year for 8 years. At the end of 8 years the project is finished and the equipment has zero salvage value. Calculate the net present value of the project if it is financed by borrowing the full upfront capital cost at 7% per annum, compounded yearly. 2. Consider the first project again. This time, the company has the funds available and does not need to borrow. Determine the internal rate of return (IRR). This is defined as the value of the discount rate which makes the NPV zero