You are evaluating buying a patent for $800,000. The patent will not generate any income, but allows you to depreciate/amortize $133,333 every year for 6 years. After 6 years, you expect to sell the patent for $960,000. Your tax rate is 23%.

One-year corporate bonds of the same risk return 9% and one-year municipal bonds of the same risk return 3%.

Part 1 What is your cost of capital?

3+ decimals

Part 2 What is the NPV of the project?