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JG Corporation, a firm with a 21% corporate tax rate and a 15% cos of capital, is considering a new project. The project involves the

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JG Corporation, a firm with a 21% corporate tax rate and a 15% cos of capital, is considering a new project. The project involves the introduction of a new high-efficient solar panel. The project is expected to last 5 years. You have been given the following information: Cost of new plant and equipment $22 million (investment today, year zero) Depreciation New plant and equipment are depreciated from a $22 million starting value to an end book value of $2 million in year 5 using straight-line depreciation method. Salvage value Plant and equipment will be sold for $4 million at the end of the project (year 5). Revenue and costs are provided in the following table (end of year numbers, in million $): Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Sales 30 60 90 120 20 Costs 16 31 46 61 11 NWC 1 3 6 9 12 0 0 0 The firm's other projects are highly profitable and exceed any loss of this new project. However, starting the new project will have positive effects on other existing projects' sales. How much would the NPV of the project change (in million $) if we gain $1 million in sales (net of costs and before tax) on other projects in each of the years 1 to 5 due to the introduction of the new solar panel? -$3.35 million +$3.35 million +$5 million +$2.65 million

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