The management of General Motors is thinking of building a plant to assemble semi-autonomous (i.e., partially self-driving) cars. Work on the plant will begin 6 years from now (project year 0) and will end about 7 years from now when GM moves into the finished plant both new equipment and equipment GM currently owns. Production and sales of semi-autonomous cars will start immediately once the plant is finished. For analytical purposes GM assumes it will operate the plant for five full years before selling it 12 years from now. GM uses a discount rate of 10% for projects of this type. GM's marginal tax rate is 30%. GM will pay $150m 6 years from now to build the plant. Once the plant is operational GM will start depreciating the plant to zero over 20 years using straight-line depreciation. GM estimates that the plant will have a market value of $120m at the end of the project's life. Seven years from now (project year 1) GM will spend $1,000m on new equipment. The equipment falls into the 5-year MACRS life class with the following (rounded) depreciation percentages: year 1, 20%; year 2, 30%, year 3, 20%; year 4, 12%; year 5, 12%; year 6, 6%. GM estimates that this equipment will have a market value of $75m at the end of the project's life. To finance plant construction and equipment purchases, GM will sell $1,200m in 5-year bonds with a 6% annual coupon, resulting in annual interest payments of $72m in project years 2 through 6. At the same time GM buys the new equipment it will also transfer to the plant equipment from another plant GM will be closing then. This equipment, which will then have a book value of $500m and four years of depreciable life left, is being depreciated to zero using straight-line depreciation. GM believes it could sell this equipment for $450m at the time of transfer and for $50m at the end of the project's life. Estimates of numbers of semi-autonomous cars sold, unit prices, and direct production costs per car (excluding depreciation) appear in the data block of the capital budgeting template. Sales of GM's semi-autonomous cars will reduce sales of GM's conventional cars, both internal combusion and electric. This cannabilization of sales will lead GM to produce fewer conventional cars, saving production costs and recapturing some investment in net working capital. The data block also shows numbers of conventional cars not produced and sold as well as unit prices and direct production costs per conventional car. Shortly after Google announced it was developing a semi-autonomous car in 2010, GM hastened development of its own semi-autonomous car. GM has already spent $100m on development and is committed to spending another $100m on development between now and when plant construction begins. GM's comptroller suggests spreading this $200m cost evenly over the five years that the plant is operational (i.e., a development cost of $40m per year). To produce either semi-autonomous or conventional cars, GM must hold net working capital (NWC) equal to 8% of coming-year direct production costs (excluding depreciation). GM will make the initial investment in NWC for the production of semi-autonomous cars at the end of project year 1; this investment will be recaptured at the end of the projects life. GM will reduce NWC held for conventional cars as it reduces production of these cars. Once the plant is operational GM will hire several executives to manage day-to-day activities at the plant. The annual cost of their compensation packages will start at $15m (in project year 2) and rise by 5% per year thereafter. Compute free cash flow for each year in the project's life, then compute the project's NPV, IRR and PI standing at project year 0 (i.e., 6 years from now.) Should GM produce semi-autonomous cars? Additionally, what is the NPV of this project now?