You are looking at project with a 10-year life. The initial investment is $150 million and is depreciable straight-line to a salvage value of $40 million and the after-tax operating income each year is $20 million. There are no capital maintenance or working capital requirements. The cost of capital for the company taking the project is 11% but this project is in a riskier business, with a cost of capital of 15%. The marginal tax rate is 40%. What is the correct NPV of this project?

a.

15.47

b.

11.36

c.

26.35

d.

9.22