Suppose that Taylor Swift is considering whether to purchase a tour bus for the next three years.

The bus would cost $$775,000,$ and would generate cash flows of $$175,000$ in year $1,$$$280,000$ in

year $2$ and $$540,000$ in year $3.$

a$.$ If she uses a cost of capital of $11\%,$ what is the net present value of this investment?

b$.$ Given your answer to part a$),$ what does this imply about the IRR relative to the WACC?