1 An investor borrows money at an effective rate of interest of 10% pa to invest in a 6-year project. The cashflows for the project are: an initial outlay of $25,000 regular income of $10,000 pa during the first 5 years (assumed to be received continuously) regular expenditure of $2,000 pa during the first 5 years (assumed to be payable continuously) a decommissioning expense of $5,000 at the end of the 6th year. Calculate: (i) the net present value of the project's cashflows (ii) the internal rate of return. (solutions: $3,996.16, 18.9% pa)