Owls Company is considering opening a new production facility in Philadelphia, Pennsylvania. In deciding whether to proceed with the project, the company has accumulated the following information:

The estimated up-front cost of constructing the facility at t = 0 is $10 million. For tax purposes the facility will be depreciated on a straight-line basis over 5 years.

The company plans to operate the facility for 4 years. It estimates today that the facilitys salvage value at t = 4 will be $3 million.

If the facility is opened, Qwls Company should increase its inventory by $4 million at t = 0. In addition, its accounts payable will increase by $3 million at t = 0. The companys net operating working capital will be recovered at t = 4.

If the facility is opened, it will increase the companys sales by $7 million each year for the 4 years that it will be operated (t = 1, 2, 3, and 4).

The operating costs (excluding depreciation) are expected to equal $3 million a year.

The companys tax rate is 40 percent.

The projects cost of capital is 12 percent.

What is the projects net present value (NPV)? What is the projects MIRR?