In the process of analyzing potential investments and projects, it may be beneficial to use both the Internal Rate of Return (IRR) and the Net Present Value (NPV).

Finally, you are able to get the publisher to increase your advance to $750,000, in addition to the $1 million when the book is published in four years. Should you accept or reject this new offer? Again, plot a diagram that measures NVP (on the y-axis) vs. discount rate (on the x-axis) to solve this problem. (Hint: Have your scale on the x-axis go to 50% (discount rate)). Determine the IRR for this deal.