You are the CFO of a large company, and you must evaluate the following investment opportunity. The projects initial capex is $100 million (no additional capex needed). Assume a straight-line, 10 year depreciation schedule. Assume that the project will produce revenues of $30m, $80m, $110m over the next 3 years. Operating expenses (excluding depreciation) will be 50% of revenues. Net operating working capital will be 10% of revenue. Interest expense is 10% of revenue. The firms average tax rate is 20%, and the marginal tax rate is 30%. You expect to sell your PP&E at the end of year 3 for $40 million. Assume all of the operating cash flows occur.

1. $290.68 million B) $386.92 million C) $264.86 million