XYZ Corporation is considering an investment in a new product line. The initial investment required is $1,000,000. The new product line is expected to generate cash inflows of $250,000 per year for the next 6 years. The company uses a discount rate of 10%.

• Requirements:
  • Calculate the Net Present Value (NPV) of the investment.
  • Determine the Internal Rate of Return (IRR).
  • Assess whether XYZ Corporation should proceed with the investment based on NPV and IRR.
  • Discuss the potential impact of this investment on XYZ Corporation's financial statements and overall financial health.