Your firm has been hired to develop new software for the$$ university's class registration system. Under the$$ contract, you will receive $$$$500$ comma $000$ as an upfront payment. You expect the development costs to be $$$$450$ comma $000$ per year for the next $3$ years. Once the new system is in$$ place, you will receive a final payment of $$$$900$ comma $000$ from the university $4$ years from now.

a$.$ What are the IRRs of this$$ opportunity? $($Hint$$: Build an Excel model which tests the NPV at$1\%$ intervals from$1\%$ to$40\%.$ Then zero in on the rates at which the NPV changes$$ signs.$)$

b$.$ If your cost of capital is $10\%,$ what is the NPV of the$$ opportunity? Is it$$ attractive?

Suppose you are able to renegotiate the terms of the contract so that your final payment in year $4$ will be $$$$1$ comma $000$ comma $000.$

c$.$ What is the IRR of the opportunity$$ now?

d$.$ What is the NPV of the opportunity$$ now? Is it attractive at the new$$ terms?