$1.$ What is the net present value of the flier project, which is a $3-$year project where Dispersion would spread fliers all over Fairfax? The project would involve an initial investment in equipment of $$570,000$ today. To finance the project, Dispersion would borrow $$570,000.$ The firm would receive $$570,000$ from the bank today and would pay the bank $$640,000$ in $3$ years $($consisting of an interest payment of $$70,000$ and a principal payment of $$570,000).$ Cash flows from capital spending would be $$0$ in year $1,$ $$0$ in year $2,$ and $$184,000$ in year $3.$ Operating cash flows are expected to be $$215,000$ in year $1,-$$$60,000$ in year $2,$ and $$$$321,000$ in year $3.$ The cash flow effects from the change in net working capital are expected to be $$40,000$ at time $0$; $$30,000$ in year $1$; $-$$$10,000$ in year $2,$ and $$20,000$ in year $3.$ The tax rate is $15$ percent. The cost of capital is $5\mathrm{.}08$ percent and the interest rate on the loan would be $3\mathrm{.}94$ percent.

$2.$ What is the NPV of the mall project? The project would require an initial investment in equipment of $$600,000$ and would last for either $3$ years or $4$ years $($the date when the project ends will not be known until it happens and that will be when the equipment stops working in either $3$ years from today or $4$ years from today$).$ The first annual operating cash flow of $$238,000$ is expected in $1$ year, and annual operating cash flows of $$238,000$ per year are expected each year until the project ends in either $3$ years or $4$ years. In $1$ year, the project is expected to have an after$-$tax terminal value of $$377,000.$ The cost of capital for this project is $6\mathrm{.}82$ percent.