The Following Data Have Been Collected by Capital Budgeting Analysts

The following data have been collected by capital budgeting analysts at Erica, Inc.concerning a new product line currently under consideration by management:
$\begin{array}{lrr} \text { Investment in machinery and equipment required to produce the product } &\$3,500,000\\ \text { Net increase in working capital associated with the new product. } &\\ \text {Assume that this investment will be recovered at the end of the project } &500,000\\ \text { Net cash inflow from operations for the expected life of the product line for: } &\\ \text { Year 1 } &550,000\\ \text { Yeat 2 } &900,000\\ \text { Year 3 } &1,400,000\\ \text {Year 4 } &1,800,000\\ \text {Salvage value of machinery and equipment at the end of the } &\\ \text {product line's life } &300,000\\ \text { Cost of capital } &10\%\\\end{array}$

(a.)Calculate the net present value of the proposed investment in the new product line.Ignore income taxes, and round all answers to the nearest $1.
(b.)What will the internal rate of return on this investment be relative to the cost of capital? Explain your answer.