Tiger Ltd is contemplating a $3-$year project that will have sales that will grow $8$ percent per

year from a year $1$ figure of $$20$ million $($in nominal terms$)$ and cash costs that will grow at $6$

percent a year from a year $1$ figure of $$4$ million $($in nominal terms$).$ Machinery that needs to

be purchased will cost $$36$ million and will last $3$ years and is depreciated by the straight$-$line

method to zero. This equipment will realise $$8$ million $($pre$-$tax and in today$$s dollars$)$ when

resold at the end of the project. The annual inflation rate is expected to be $2$ percent and the

Tiger Ltd project has a WACC of $10$ percent in real terms $($as distinct from nominal$)$; and the

corporate tax rate and capital gains tax rate are both $30$ percent. The NWC requirement each

year for this project is $10$ percent of sales. This investment is fully recovered at the end of the

project.