A manufacturer wants to introduce new factory equipment that requires machinery to be purchased today for $120 million. This new machine will last for five years, and will be depreciated straight-line to a value of zero at the end of year five. The extra savings from the new machine are expected to produce project inflows of $47 million per year, beginning one year from today, for five consecutive years. The machine does carry extra costs such that project outflows will be $9 million per year, beginning one year from today, for five consecutive years. If the firms tax rate is 30% and the required rate of return is 13%, which of the following comes closest to the NPV of the new equipment project?

Select one:

a. $4.92 million

b. ($3.96) million

c. $8.13 million

d. $1.84 million

e. ($1.12) million