Suppose a company has the opportunity to bring out a new product, the Vitamin$-$Burger. The initial cost of the assets is $$70$ million, and the company's working capital would increase by $$20$ million during the life of the new product. The new product is estimated to have a useful life of four years, at which time the assets would be sold for $$15$ million. Management expects company sales to increase by $$120$ million the first year, $$140$ million the second year, $$120$ million the third year, and then trailing to $$50$ million by the fourth year because competitors have fully launched competitive products. Operating expenses are expected to be $60\%$ of sales, and depreciation is based on an asset life of three years under MACRS $($modified accelerated cost recovery system$).$ The MACRS deprecation schedule is Year $1$: $33\mathrm{.}33\%.$ Year $2$: $44\mathrm{.}45\%.$ Year $3$: $14\mathrm{.}81\%.$ Year $4$: $7\mathrm{.}41\%.$ Assume the required rate of return on the Vitamin$-$Burger project is $8\%$ and the company's tax rate is $30\%.$

$3.$ What is the investment outlay?

A$.-100$ million.

B$.-110$ million.

C$.-120$ million.

D$.-90$ million.

E$.-70$ million.

What is the cash operating expense for Year $2?$

A$.72$ million

B$.84$ million

C$.36$ million

D$.92$ million

E$.96$ million

What is the depreciation for Year $4?$

A$.10\mathrm{.}37$ million

B$.7\mathrm{.}23$ million

C$.6\mathrm{.}24$ million

D$.7\mathrm{.}30$ million

E$.5\mathrm{.}19$ million

What is the after$-$tax operating cash flow for Year $4?$

A$.55\mathrm{.}60$ million

B$.41\mathrm{.}07$ million

C$.41\mathrm{.}70$ million

D$.17\mathrm{.}68$ million

E$.15\mathrm{.}56$ million

$7.$What is the total terminal after$-$tax non$-$operating cash flows for Year $4?$

A$.46\mathrm{.}06$ million

B$.41\mathrm{.}70$ million

C$.47\mathrm{.}43$ million

D$.45\mathrm{.}60$ million

E$.43\mathrm{.}33$ million

$8.$What is the NPV value of the project?

A$.30\mathrm{.}51$ million

B$.52\mathrm{.}20$ million

C$.44\mathrm{.}38$ million

D$.39\mathrm{.}45$ million

E$.37\mathrm{.}15$ million

Suppose a company has the opportunity to bring out a new product, the Vitamin$-$Burger. The initial cost of the assets is $$70$ million, and the company's working capital would increase by $$20$ million during the life of the new product. The new product is estimated to have a useful life of four years, at which time the assets would be sold for $$15$ million. Management expects company sales to increase by $$120$ million the first year, $$140$ million the second year, $$120$ million the third year, and then trailing to $$50$ million by the fourth year because competitors have fully launched competitive products. Operating expenses are expected to be $60\%$ of sales, and depreciation is based on an asset life of three years under MACRS $($modified accelerated cost recovery system$).$ The MACRS deprecation schedule is Year $1$: $33\mathrm{.}33\%.$ Year $2$: $44\mathrm{.}45\%.$ Year $3$: $14\mathrm{.}81\%.$ Year $4$: $7\mathrm{.}41\%.$ Assume the required rate of return on the Vitamin$-$Burger project is $8\%$ and the company's tax rate is $30\%.$

$3.$ What is the investment outlay?

A$.-100$ million.

B$.-110$ million.

C$.-120$ million.

D$.-90$ million.

E$.-70$ million.