1.X Company has an opportunity to accept a special order that will result in immediate profit of $60,000. The marketing manager warns that if X Company accepts the order, there will be an adverse reaction from regular customers, and X Company's regular profits will fall by an estimated $10,000 in each of the next five years.

Assuming a discount rate of 7%, what is the net present value of accepting the special order?

2.X Company currently buys 7,500 units of a part each year from a supplier for $8.00 per part, but it is considering making the part instead. It paid a consulting firm $13,000 to do the make/buy analysis. The consulting firm determined that X Company would have to buy equipment costing $150,000 to make the part. The equipment would last for six years, at which time it would have zero disposal value. The consulting company also estimated that it would cost X Company $29,490 a year to produce the 7,500 units.

What is the approximate rate of return if X Company makes the part instead of buying it from the supplier? [Note: Submit 1% as .01, etc.]