Al Gore of Totally serial enterprises is considering replacing the company s now tv network with the manbearpig adventure network. The new networks motto would be manbearpig is half man, half bear, and half pig. And were got to find him. Were totally serial!

The current tv network was started two years ago at a cost of $120 million with an expected useful life of 8years. This old project cost is being deprecated to zero ov its 8year useful life using simplified straigheline depreciation. The current tv network can be sold today for $100 million. If this network had been kept, itwwould have had a salvage value of $20 million at the end of its expected usefl life six years from today.

The manbearpig network would cost $160 million to start today. Its expected useful life is 6years and it falls in the 5-year macrs depression class ( yr1 20% 2,32%,3,19%,4,12%,5 11%,6 6%). The manbearpig is expected to have a salvage value of $50 million at the end of 6year. The manbearpig is expected to increase totally serial enterprises annu revenue and operating expenses by$60 millions and $20 million respectively over the old current network during 6 years. The company marginal tax rate is40%. Weighted average cosy of capital is 13%. Whats the initial cash flow for the replacement project?

A-64 million

B -156million

C -60million

D-35milliom

E -160milliom