USE THE TABLE BELOW TO ANSWER THE FOLLOWING TWO $(2)$ QUESTIONS

Erma$$s Beauty Supply, Inc. is considering expanding the company$$s existing store. Erma$$s wants to lease

the office space next door. Erma$$s must spend $$140,000$ on new equipment to expand. The equipment is

expected to have a zero$-$salvage value and an $8-$year useful life. Erma$$s believes that the equipment will be

worthless at the end of its $8-$year life. Erma$$s believes it will have to increase net working capital by

$$15,000$; this amount will be recovered at the end of $8$ years. Last month, Erma$$s spent $$18,000$ to conduct

a survey of potential new customers in the area surrounding the current store to see if there was sufficient

demand for a larger store. Erma$$s estimates that net revenue will increase by $$135,000$ per year in the new

store for eight years. The direct expenses incurred to make those sales are $$75,000,$ including rent. The

lease Erma$$s is considering signing is for $8$ years. Erma$$s Beauty Supply has a marginal tax rate of $40\%$

and has a weighted average cost of capital of $10\mathrm{.}0\%.$

$40.$ What is the IRR of this project?

$41.$ What is the NPV of this project?