Chapter 13 1. 'XYZ Company has just sold some property with proceeds of $500,000. They are considering investing part of these funds in the business in a small division. They would need to purchase special equipment costing S120,000. They would also have to invest $70,000 in working capital which would be returned at the end of the project. Marketing studies indicate the annual cash inflow after expenses should be $40,000 per year. They believe that this division will operate the business for seven years. At that time they believe the equipment could be sold at $12,000 of the original cost. They want a rate of return of 14% Calculate the net present value of this project. (50 pts) The Munich Company is considering a new project that would require $750,000 of investment now. They believe the project will generate $90,000 of additional cash flow cach year and last for 12 years. Please calculate the internal rate of return (indicate what two values it falls between.) Also, calculate the payback time. (50 pts)