4) [2 points] You are the CFO of a large company, and you must evaluate the following investment opportunity. The project's initial capex is $100 million (no additional capex needed). Assume a straight-line, 10 year depreciation schedule. Assume that the project will produce revenues of $40m, $80m, $100m over the next 3 years. Operating expenses (excluding depreciation) will be 40% of revenues. Net operating working capital will be 10% of revenue. Interest expense is 10% of revenue. The firm's average tax rate is 20%, and the marginal tax rate is 30%. You expect to sell your PP&E at the end of year 3 for $50 million. Assume all of the operating cash flows occur in the middle of the year. Assume that you recoup your net operating working capital 6 months after the sale of your PP&E, and the WACC is 20%. What is the NPV of this opportunity? A) $4.173 million B)__$1.620 million C) $7.266 million 4) [2 points] You are the CFO of a large company, and you must evaluate the following investment opportunity. The project's initial capex is $100 million (no additional capex needed). Assume a straight-line, 10 year depreciation schedule. Assume that the project will produce revenues of $40m, $80m, $100m over the next 3 years. Operating expenses (excluding depreciation) will be 40% of revenues. Net operating working capital will be 10% of revenue. Interest expense is 10% of revenue. The firm's average tax rate is 20%, and the marginal tax rate is 30%. You expect to sell your PP&E at the end of year 3 for $50 million. Assume all of the operating cash flows occur in the middle of the year. Assume that you recoup your net operating working capital 6 months after the sale of your PP&E, and the WACC is 20%. What is the NPV of this opportunity? A) $4.173 million B)__$1.620 million C) $7.266 million