Question: A corporation plans to invest in a small project which costs a one-time expenditure of $600,000 at Year 1. It intends to finance this project by borrowing from a local bank which requires the original fee of $50,000. Compounded interest payments are made annually at a nominal interest rate of 7% year with the repayment of the principal at the end of Year 5. The hank compounds the financial charges monthly. The MARR of the corporation it 15%.

1) Calculate the total present value of the cash inflows and outflows.

2) Based on the result from 1), find the minimum annual return over the five years that the corporation should generate to make the project viable economically (i.e., total PV = 0 after considering the annual return).