$$7$

Suppose that Caterpillar $($CAT$)$ has a project with the following cash flows:

YEAR

$0$

$1$

$2$

$3$

$4$

Cash flow

$-$$$40\mathrm{.}00$

$$13\mathrm{.}00$

$$11\mathrm{.}00$

$$11\mathrm{.}00$

$$12\mathrm{.}00$

The company has debt valued at $45\mathrm{.}00$ billion on its balance sheet, while the market value of its common stock is roughly $31\mathrm{.}00$ billion. The yield to maturity on the debt is $5\mathrm{.}50\%,$ and the cost of equity for the firm is $12\mathrm{.}00\%.$ Finally, the marginal tax rate facing the company is $34\mathrm{.}00\%.$

What is the NPV for this project?