Guandong Machinery is evaluating a new project to produce encapsulators. The initial investment in plant and equipment is RMB 200,000. Sales of encapsulators in year 1 are forecasted at RMB 220,000 and costs at RMB 110,000 in nominal terms, or 200,000 and 100,000 in real terms given a 10% inflation. Both are expected to increase by 10% a year in line with inflation. Profits are taxed at 21%. Working capital in each year consists of inventories of raw materials and is forecasted at 20% of sales in the following year. The project will last 4 years and the equipment at the end of this period will have no further value. For tax purposes the equipment can be depreciated straight-line over these 4 years. The nominal discount rate is 15%. Question: What is the NPV of the project? Multiple Choice NPV = $167 NPV = $91 NPV = $196 NPV = $233