Question: You are analyzing a project with a five-year life. The project requires an initial investment of $20 million, depreciable straight line over 5 years to

You are analyzing a project with a five-year life. The project requires an initial investment of $20 million, depreciable straight line over 5 years to a salvage value of zero. The expected after-tax operating income is expected to remain constant each year over time and the NPV is $12 million with a five-year life, based on a cost of capital of 10%. If you want to want to continue this project in perpetuity with the same yearly cash flows, what NPV would you assess for this project?

23.36 million

2.47 million

-11.35 million

64.41 million

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