1.- Consider a project lasting one year only. The initial outlay is $1,000 and the expected inflow is $1,240. The opportunity cost of capital isr= 0.24. The borrowing rate isr_D= 0.10, and the tax shield per dollar of interest isT_c= 0.21.( Do not round intermediate calculations. Round your answers to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required.)

a.What is the project's base-case NPV?

b.What is its APV if the firm borrows 35% of the project's required investment?

2.- Digital Organics (DO) has the opportunity to invest $1.09 million now (t= 0) and expects after-tax returns of $690,000 int= 1 and $790,000 int= 2. The project will last for two years only. The appropriate cost of capital is 10% with all-equity financing, the borrowing rate is 6%, and DO will borrow $390,000 against the project. This debt must be repaid in two equal installments of $195,000 each. Assume debt tax shields have a net value of $0.35 per dollar of interest paid.

a. Calculate the project's APV.(Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations. Round your answer to the nearest whole number.)