Beta Company generated $ 14 million in pre-tax operating income on $ 100 million in revenues last year; the firm is stable and does not expect revenues or operating income to change over the next 10 years. Its eCommerce management is in shambles and eCommerce as a percent of revenues amounted to 10% last year. Beta is considering investing in a new eCommerce management system, which will cost $ 17 million. The eCommerce management system is expected to have a 10- year life, over which period it can be depreciated straight line down to a salvage value of zero. The new eCommerce management system benefits the company by providing management with updated sales information; it is expected to increase revenues to $ 117 million next year (and operating margins to remain unchanged). The revenues and operating income from year 2 to year 10 will remain unchanged at year 1 levels.

1. Calculate the cashflows at time 0 (today) from this investment.

2. Calculate the NPV of investing in the new eCommerce management system.

3. Calculate IRR of the new eCommerce management system.