Bell Telecomm is planning to expand its network. The details of the prospective project are presented below. Compute the NPV and advise Bells executives on the viability of the project.

Investment of $250,000,000 required to build the network.

Initial working capital allocation of $90,000,000.

Operating expenses are expected to be $30,000,000 each year.

Revenue from customers is expected to be $110,000,000 each year.

The network will be depreciated straight-line to zero over the life of the project.

The corporate taxation rate is 30%.

The project has a six year life.

All working capital is to be returned in the final year of the project.

The discount rate is 11%.

Use the template shown below to answer the following questions:

a) What is the NPV for this project. While writing answer for NPV, put + sign for positive NPV and - sign for negative NPV.

b) Should the project be accepted based on your NPV calculations?

b) What is the IRR for this project?