Question: 7) Consider the following project: Initial outlay = $19 million Year 1 expected cash flow = $7 million Year 2 expected cash flow = $8

7)

Consider the following project:

Initial outlay = $19 million

Year 1 expected cash flow = $7 million

Year 2 expected cash flow = $8 million

Year 3 expected cash flow = $10 million

Project cost of capital = 16.9%p.a.

The net present value of this project is closest to (in millions to the nearest three decimals):

a.

$-0.898

b.

$-3.515

c.

$37.102

d.

$0.091

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