Polycorp is considering an investment in new plant of $3 million.The project will be partially financed by a loan of $2 million, which will be repaid over five years in equal annual end of year instalments at a rate of 6.5 percent pa.The rest of the project will be financed by equity. Assume straight-line depreciation over a five-year life, and no taxes. The project's cash flows before loan repayments and interest are in the table below. Cost of capital is 12.30% pa (the required rate of return on the project). A salvage value of $190,000 is expected at the end of year five and is not included in the cash flows for year five below.