1. You would like to open an investment company. The cost of building up the company is $750,000. You offer your clients the following deal: For five annual deposits of $500,000 for the next 5 years, you will pay them $2 million at year 6. Your cash flow is expected to be as follows: (12 points)

1. Create and graph the NPV profile. At what exact rate(s), the NPV is equal to zero?
2. Using the NPV profile, show exactly at what range of cost of capital you should accept the project? Explain.
3. If the cost of capital and the reinvestment rate are the same, 15%, what is the IRR and the modified IRR?
4. If the cost of capital is 15% but the reinvestment rate is 10%, what is the modified IRR? Explain why this MIRR is different from the MIRR in part a.

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