Go over "Case Study - Dupont" for the steps needed to help a company decide on "go" or "no go" before starting big projects. Complete all steps in the case before answering the following question. Make only one change in the Dupont case study in the lecture notes. The company realized that they were too optimistic and overestimated annual sales. So, the company has cut down the project's expected annual sales from $60 million in the lecture note to $44 million.

How much is the Dupont chemical plant's net present value (NPV) in millions? Enter your answer in the following format: + or - 1.23.

Hint #1: Answer is between -0.25 and -0.96 Hint #2:

Note: Positive NPV projects must be pursued and negative NPV projects must be abandoned.

DuPont case study:

Suppose DuPont is considering an investment that would extend the life of one of its chemical facilities for 4 years

The project would require upfront costs of $6.67 million plus a $24 million investment in equipment

The equipment will be obsolete in 4 years and will be depreciated via straight-line over that period

During the next four years, however, DuPont expects annual sales of $60 million per year from this facility

Material costs and operating expenses are expected to total $25 million and $9 million, respectively, per year

DuPont expects no net working capital requirements for the project, and it pays a tax rate of 35%

Dupont's 10-year, 7% annual coupon, $1,000 PAR bonds are currently trading for $1,275.54

Assume DuPonts class A preferred stock has a price of $66.67 and an annual dividend of $3.50.

Assume the equity beta of DuPont is 1.37, the yield on ten-year Treasury notes is 3%, and you estimate the market risk premium to be 6%.

The current market values of DuPonts common stock, preferred stock, and debt are $30,860 million, $187 million, and $9543 million, respectively