Blue Hen Corporation is considering an investment of $40,000,000 to build more apartments to meet an increasing demand for students. They expect to generate net cash flows from this investment: Year 1 of $10,200,000; Year 2 of $11,400,000; Year 3 of $12,900,000; and Year 4 of $15,700,000. They use the NPV decision rule and want to know if this project would add value.

Question 1: Should this project be approved assuming a required return of 8%?

Question 2: Should this project be approved assuming a required return of 10%?