1. A firm is considering a new project that costs $10,000 that will last 5 years and will have no salvage value. The project would save $3,000 per year in salaries and would be financed with a loan that will accrue interest costs of 15% per year. The firms tax rate is 40%, its cost of capital is 20%, and the firm will use the straight-line method of depreciation.
   1. What is the NPV of the project?
   2. Should the firm invest in the project?