5 Years ago, Abel Corp spent $75,000 to explore the construction of a new plant, but decided not to. Now, a New plant is again under consideration. It would cost $1,000,000,000, and require an initial investment in working capital of $1,000,000. The plant would have a 25 year useful life, and be depreciated on a straight line basis. The initial level of working capital would increase by $500,000 every year for 25 years. In year 26, all pant activity would stop, so that the plant could be deconstructed (worthless) and the working capital could be reduced to 0. The plant would provide annual revenues of $60,000,000, and annual direct expenses of $15,000,000. Assume a corporate tax rate of 40%.

What is the NPV of the project at a discount tate of 4%?

What is the IRR, and can the simplified IRR rule be used for this project?