The Sopwith Aviation Company is considering building a new short-range commuter jet, code named 'Sky Streak!'...

Transcribed Image Text:

The Sopwith Aviation Company is considering building a new short-range commuter jet, code named 'Sky Streak!' The aircraft's engines will be powered by a new green energy source: high-tension elastomer. The project is expected to last three years. Selected cash flows for the project are summarized in the table below. Sopwith's tax rate is 34% and its cost of capital is 12%. The NPV of the project is $242.86M. Selected Cash Flows for the 'Sky Streak' Project ($000,000s) Year Free Cash Flow 0 1 2 3 -3,500 1,184 1,252 2,371 The Sky Streak project is expected to reduce sales of Sopwith's other commuter jet, the Sopwith Camel, as some airlines choose the new, more environmentally friendly Sky Streak over the older Camel. The lost Camel sales are expected to reduce operating cash flows by $110M per year for the three years of the Sky Streak project. Given this information, what is the revised NPV for the Sky Streak project? (Express your answer in millions of dollars rounded to two decimal places.) The Sopwith Aviation Company is considering building a new short-range commuter jet, code named 'Sky Streak!' The aircraft's engines will be powered by a new green energy source: high-tension elastomer. The project is expected to last three years. Selected cash flows for the project are summarized in the table below. Sopwith's tax rate is 34% and its cost of capital is 12%. The NPV of the project is $242.86M. Selected Cash Flows for the 'Sky Streak' Project ($000,000s) Year Free Cash Flow 0 1 2 3 -3,500 1,184 1,252 2,371 The Sky Streak project is expected to reduce sales of Sopwith's other commuter jet, the Sopwith Camel, as some airlines choose the new, more environmentally friendly Sky Streak over the older Camel. The lost Camel sales are expected to reduce operating cash flows by $110M per year for the three years of the Sky Streak project. Given this information, what is the revised NPV for the Sky Streak project? (Express your answer in millions of dollars rounded to two decimal places.)