Evaluate the following project $($FIND NPV and IRR$)$:

A$.$ The Investment

$$ Project cost: $$75$ million: This can be depreciated to ZERO using straight line for $2$ years $($project$$s life is $2$ years$).$

$$ Tax Rate $=25\%$

$$ Revenue is expected at $85$ million per year.

$$ Costs of goods sold are estimated to be $45\%$ of revenues.

$$ Fixed costs are $12$ million in both years.

$$ This project will have a value of $10$ million at the end of the second year.

B$.$ The Firm

$$ Long$-$term debt outstanding $$35$ million

$$ The firm$$s bonds carry a face value of $$1000$ and a coupon rate of $6\%,$ interest is paid semi$-$annually. Currently $15$ year maturity bonds are selling for $$875.$

$$ Number of shares of common stock outstanding is $700,000$

$$ Price per share $$35$

$$ Beta $1\mathrm{.}3$

$$ Risk Free rate is $3\%$

$$ Expected return on the S$+$P $500($the market$)$ is $14\%$

NPV $=$

IRR $=$