The financial manager at Genesis Company is looking into the purchase of an apartment complex for $550000. Net after-tax cash flows are expected to be $65000 for each of the next five years, then drop to $50000 for four years. Genesis' required rate of return is 9 percent on projects of this nature. After nine years, Genesis Company expects to sell the property for after-tax proceeds of $300000. What is the internal rate of return (IRR) and net present value (NPV) on this project?（ ）
IRR Keystrokes:
CF0 =-$550000, CF1=$65000, F1=5, CF2=$50000, F2=3; CF3=$350000, F3=1.
NPV Keystrokes:
CF0 =-$550000, CF1=$65000, F1=5, CF2=$50000, F2=3; CF3=$350000, F3=1.
CPT NPV, I=9.
Note: Although the rate of return is positive, the IRR is less than the required rate of 9%. Hence, the NPV is negative.