Blue Star Inc. is considering a new project that requires an investment of $60 million in machinery.This is expected to produce sales of $94 million per year for 4 years and operating expenses of $71 million per year for 4 years.The machinery will be fully depreciated to a zero book value over 4 years using straight-line depreciation.They can sell it for $5 million at the end of 4 years.Working capital costs are negligible.The tax rate is 30%.The unlevered cost of capital is 12%.

Calculate the base-case NPV.

The project will be financed with $20,000,000 in bonds. The bonds have a 4-year life, a coupon rate of 6% and a yield of 6%.Find the adjusted present value (APV).