You consider a project which will provide net cash inflow of $60,000 for the firm the first year, and the cash flows are projected to grow at a rate of 6 percent per year forever. The project requires an initial investment of $925,000.

a. If the cost of capital is 13%, what's NPV of the project?

b. You are unsure about the 6 percent growth rate in the cash flows. At what constant rate would you break even if the project still required a 13 percent return on investment?