BI is analyzing a proposal for mining and sealing a small deposit of high-grade magnesium ore. A consulting study which cost $800 million has been completed to assess the costs and benefits of the project. The data have been simplified in the following terms:

The tax rate is 20%.

The global unified after-tax cost of capital is 12% for projects with this level of risk. The project life is 5 years.

The project would require the purchase of a $10 million mining equipment. This equipment would be depreciated (straight-line) over 5 years to a zero-salvage value. However, experts argue that the equipment could be sold for as much as $2 million after 5 years.

The consultants estimate that BI will be able to sell 750,000 pounds of magnoosium a year at a price of $20 a pound in year 1. It is assumed that sales will increase 5% for each year.

Annual maintenance expenses will be $10 million in year 1. The total cost increase as sales increase (%5)

The working capital requirements will be $1.5 million starting immediately , then $ 4.075 m, $ 4.279 m , $4.493 m, $4.717 m ,

Find the NPV