The Lobster Corporation is planning the construction of a new restaurant in London. The initial cost of the investment is 1,000,000.The project will generate cash flows of 100,000 per year and cash flows occur at a frequency of 12 months indefinitely. The corporation has a total value of 60 million and has outstanding debt of 30 million. The corporate tax rate is 20%.The firm has an after tax cost of debt of 6% and a cost of equity of 10.2%. What is the NPV of the project if undertaken today?

Select one:

a.626,016

b.220,564

c.None of these answers is correct.

d.1,000,000

e.333,333