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Question 6 (evaluating investment projects) General Motors (or Toyota) is thinking of investing in new production equipment, which will cost $100 million in year zero, and will generate cost savings of $60 million in year 1,$40 million in year 2, and $30 million in year 3 . After 3 years, the salvage value is zero. The cost of capital (discount rate) is 25% for General Motors and 10% for Toyota. (Due to GM's recent bankruptcy, investors are scared to lend it money, so GM has to pay much higher interest rates to attract capital). Required: a) What's the NPV of this project for General Motors? Notice that cost saving is a positive net cash flow. A. 15 million B. 11.04 million C. 15 million D. 11.04 million Should GM invest, based on NPV? Yes No b) What's the NPV of this project for Toyota? A. 10.14 million B. 20 million C. 10.14 million D. 20 million Should Toyota invest, based on NPV? Yes No