4. A new product is expected to produce the net cash flows shown below.

A. What is the net present value of this investment if the required return is 15%?

B. Is the actual return more or less than the required rate? Why? (You may use tables or Excel, but it's a good idea to use both as a check).

Year Net Present Value

0 -$700

1 -500

2 500

3 1,000

4 500

5 200

Total $1,000

NPV

IRR