7)

Consider the following project:

Initial outlay = $19 million

Year 1 expected cash flow = $7 million

Year 2 expected cash flow = $8 million

Year 3 expected cash flow = $10 million

Project cost of capital = 16.9%p.a.

The net present value of this project is closest to (in millions to the nearest three decimals):

a.

$-0.898

b.

$-3.515

c.

$37.102

d.

$0.091