The Datum Co$.$ has recently completed a $$200,000,$ two$-$year marketing study. Based on the results of the study, Datum has estimated that $6,000$ units of its new electro$-$optical data scanner could be sold annually over the next $8$ years, at a price of $$8,000$ each. Variable costs per unit are $$4,400,$ and fixed costs total $$5\mathrm{.}4$ million per year.

Start$-$up costs include $$17\mathrm{.}6$ million to build production facilities, $$1\mathrm{.}5$ million for land, and $$4$ million in net working capital. The $$17\mathrm{.}6$ million facility will be depreciated on a straight$-$line basis to a value of zero over the eight$-$year life of the project. At the end of the projects life, the facilities $($including the land$)$ will be sold for an estimated $$4\mathrm{.}7$ million. The value of the land is not expected to change during the eight year period.

Finally, start$-$up would also entail tax$-$deductible expenses of $$0\mathrm{.}4$ million at year zero. Datum is an ongoing, profitable business and pays taxes at a $35\%$ rate on all income and capital gains. Datum has a $20\%$ opportunity cost for projects such as this one.

What operating cash flow does Datum's project generate each year during its life?

$$9\mathrm{.}1$ million

$$14\mathrm{.}0$ million

$$11\mathrm{.}3$ million

$$21\mathrm{.}6$ million

Continuing the previous problem, what is the initial cash flow at year $0?$

$$17\mathrm{.}6$ million

$$23\mathrm{.}36$ million

$$19\mathrm{.}1$ million

$$23\mathrm{.}56$ million

Continuing the previous problem, what is the terminal year cash flow?

$$14\mathrm{.}88$ million

$$7\mathrm{.}58$ million

$$20\mathrm{.}00$ million

$$18\mathrm{.}88$ million

What is the net present value of Datum's project?

$$21\mathrm{.}76$ million

$$45\mathrm{.}12$ million

$$23\mathrm{.}36$ million

$$0\mathrm{.}0$ million