Merrill Corp. has the following information available about a potential capital investment:

Initial investment $ $1,000,000$

Annual net income $ $100,000$

Expected life $8$ years

Salvage value $ $110,000$

Merrill$$s cost of capital $7\%$

Assume straight line depreciation method is used.

Required:

$1.$ Calculate the project$$s net present value.

$2.$ Without making any calculations, determine whether the internal rate of return $($IRR$)$ is more or less than $7$ percent.

$3.$ Calculate the net present value using a $14$ percent discount rate.

$4.$ Without making any calculations, determine whether the internal rate of return $($IRR$)$ is more or less than $14$ percent.