What is the net cash flow associated with the project

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Lehman Clinic has been asked to provide exclusive healthcare services for next year's World Exposition. Although flattered by the request, the clinics' managers want to conduct a financial analysis of the project. An up-front cost of $190,000 is needed to get the clinic in operation. Then, a net cash inflow of $1.5 million is expected from operations in each of the two years of the exposition. However, the clinic has to pay the organizers of the exposition a fee for the marketing value of the opportunity. This fee, which must be paid at the end of the second year, is $2.5 million.

1. What is the net cash flow associated with the project?

2. What is the project's IRR?

Reference no: EM132537942

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