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

Initial Investment	1,700,000
Annual Net income	190,000
Expected Life	8 years
Salvage Value	250,000
Merills Cost of Capital	10%

Assume straight line depreciation method is used.

Required:

1. Calculate the projects net present value.

2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 10 percent.

3. Calculate the net present value using a 15 percent discount rate.

4. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 15 percent.

NET PRESENT VALUE IS NOT 397,220