ABC International is evaluating a project in Buffalo. The project will create the following cash flows: Year Cash Flow 0 -$1,160,000 1 $335,000 2 $400,000 3 $295,000 4 $250,000 All cash flow will...

ABC International is evaluating a project in Buffalo. The project will create the following cash flows:

Year   Cash Flow

0        -$1,160,000

1        $335,000

2         $400,000

3         $295,000

4        $250,000

All cash flow will occur in Buffalo and expressed in dollars. In an attempt to improve its economy, the Buffalo government declared that all cash flows created by a foreign company are blocked and must be re-invested with the government for one year. This re-investment of these funds is at 4%.

If the company uses a required return at 7%, What is the NPV? and What is the IRR on this project.