The City Council of Radiator Springs is considering a proposal to encourage tourism through the development of a water park. The developers have asked the city to provide a grant of $1,000,000 to help pay for construction of the park. They claim that the park will increase sales and tourism taxes to the community in the amount of "at least" $60,000 per year for 20 years. The mayor, who supports the investment, claims that the grant will have a return on investment of 20 percent over the life of the project. Please format the answers as required below.
A. Calculate the net present value of the proposed investment, with a discount rate of 4 percent (the current earning on Radiator Springs' investment portfolio). Record the answer rounded to the dollar (e.g., 250,000, not 250,000.00)
B. What is the internal rate of return on this proposed investment? Please report the IRR as a decimal and not percentage, carried out to three decimal places (e.g., 0.025 or 0.037, not 2.5% or 3.7%)