Your firm has been offered a contract to complete a three-year project based on a financing type arrangement. The client would advance $1 million at the inception of the project. You estimate that these funds would be disbursed as follows: Year 1 $750,000; Year 2 $ 2000,000; year 3 $50,000. In addition, your firm would need to agree to spend an additional $20,000 in year 3 as a contingency for any cost overruns. Surplus funds would be segregated as restricted cash in a money market account earning 1.5% per year. In the space below perform the computations necessary to determine whether or not to consider this contract. State your recommendation and the reasons for it.

6. Your firm is considering an investment in a five-year join ering an investment in a five-year joint venture which would require an initial investment of $10 million The nerating cash flow for the first year es $250,000. Because of the expanding market and rising de or the expanding market and rising demand for the product of the joint venture, this should increase by 3% per year in each on is should increase by 3% per year in each of the four subsequent years of the me. If your firm's cost of funds is 12%, is this an investment you would consider? Show all necessary computations below. 6. Your firm is considering an investment in a five-year join ering an investment in a five-year joint venture which would require an initial investment of $10 million The nerating cash flow for the first year es $250,000. Because of the expanding market and rising de or the expanding market and rising demand for the product of the joint venture, this should increase by 3% per year in each on is should increase by 3% per year in each of the four subsequent years of the me. If your firm's cost of funds is 12%, is this an investment you would consider? Show all necessary computations below