A company spent $45,000 on a market study and $30,000 on consulting 3 months ago. If the company approves the project, it will spend $448,000 on new machinery, $15,000 on installation, and $5,000 on shipping. The machine will be depreciated through simplified straight-line depreciation over its 8-year life. The expected sales increase from this new project is $700,000 a year, and the expected incremental expenses are $250,000 a year. To start this new project, the company will invest $100,000 in working capital. The marginal tax rate is 40%. What is the annual net cash flow per year from this project?

• $234,900
• $292,400
• $297,150
• $293,400
• $298,400

The initial outlay of a project is $10 million. The 12-year project is expected to generate annual net cash flows of $1 million each year and have an expected terminal value at the end of the project of $4 million. The cost of capital is 22 percent, and the firm's marginal tax rate is 40 percent. What is the internal rate of return of this project.

• 7.24%
• 10.61%
• 2.92%
• 6.56%
• 12.69%