PLEASE SHOW WORK:

Sandbox Inc. is considering opening a new plant that would allow them to manufacture playground equipment out of household refuse. To develop the manufacturing technology, Sandbox Inc. has incurred $8 million in R&D costs - $5 million has come from the companys internal funds and $3 million has been covered by the EPAs Garbage for the Future grant program. The project is expected to generate operating cash flows of $10, $15, $25, and $20 million in years 1 through 4. In addition to the initial outlay of $40 million required to build the plant (it will be fully depreciated and worthless by the end of the fourth year), Sandbox Inc. will need to increase its stock of NWC by $5 million at the beginning of the project and then by another $5 million at the end of year 2. Assuming a discount rate of 10%, the NPV of the project is:

A) $6.63million

B) $11.63 million

C) $11.48 million

D) $8.21 million

E) $10.76 million