Blueberry Farms Inc. is considering a four-year project to grow new and higher-quality blueberries. An initial investment of $20 million depreciable straight-line to zero over the project's life - will buy the equipment necessary to get the project off the ground. The net working capital will also require an initial investment of $2.2 million to support the planting inventory; this cost is fully recoverable whenever the project ends. In the company's opinion, the project can generate pre-tax cash revenues of $19 million against the pre-tax cash operating costs of $6.2 million on an annual basis. The market value of the used equipment over the life of the project is as follows. At the End of Year 2 4 Consider the following: An income tax rate of 35% An appropriate discount rate of 15% All types of income are taxed at the same tax rate . . If applicable, consider terminal loss or recapture based on salvage value a. If the company operates the project for four years, what is the NPV of the project? [6 points] b. If the company operates the project for: [9 points] a. b. c. the first vear only, what is the NPV of the project? the first two years only, what is the NPV of the project? the first three years only, what is the NPV of the project? c. What economic life of the project maximizes its value to the company? If it is not four years then relative to operating the project for four years, what is the value of the option to abandon it after the value-maximizing economic life? [5 points]