2. (10 points) A giant crane is about to be purchased by Mass Company. It is anticipated to require a $6 million initial investment and to produce a $3 million end-of-year cash flow per year for three years. There will be a disposal fee of $1 million at the conclusion of the fourth year. If the project's cost of capital is 12 percent, determine the project's MIRR (modified internal rate of return).

6. (15 points) At time zero (t = 0), a project requires a $90,000 initial investment in equipment and a $10,000 initial investment in working capital. You anticipate that the project will generate revenues of $120,000 per year for three years. You predict that manufacturing expenses will account for 60% of revenues. Assume that all income and expenses (i.e., t = 1, t = 2, and t = 3) occur at year's end. Over the three-year period, the equipment depreciates utilizing straight-line depreciation. The company can sell the equipment for \$10,000 at the end of the project and recover its investment in net working capital. The cost of capital is 15%, and the corporation tax rate is 21%. Calculate the project's NPV.

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