First, you need to compute your best opportunity cost of capital if you do not take your project.

The Treasury will pay $108 before tax. You could therefore earn $108 − 0.375 . $8 = $105 after taxes. This is an after-tax rate of return of 5%.

The muni will pay only $103 after taxes. This is an after-tax rate of return of 3%.

Comparing the two, your opportunity cost of capital—that is, your best investment opportunity elsewhere—

is 5% in after-tax terms. Now, move on to your project. It will have to pay taxes on $30,000, so you will have

$18,750 net return left after taxes, which comes to an after-tax amount of $80,000 − $18,750 = $61,250.

Your project NPV is therefore −$50,000 + $61,250/1.053 ≈ +$2,910. This is a great project!