As a separate project (Project P), the firm is considering sponsoring a pavilion at the upcoming Worlds Fair. The pavilion would cost $800,000, and it is expected to result in $5 million of incremental cash inflows during its 1 year of operation. However, it would then take another year, and $5 million of costs, to demolish the site and return it to its original condition. Thus, Project Ps expected cash flows (in millions of dollars) look like this:

0 1 2

-$0.8 $5.0 -$5.0

The project is estimated to be of average risk, so its WACC is 10%.

1. What is Project Ps NPV? What is its IRR? Its MIRR?

2. Draw Project Ps NPV profile. Does Project P have normal or non-normal cash flows? Should this project be accepted? Explain.