Estimate the npv of the project

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Reference no: EM1360896

The ABC Corp. is planning construction of a new shipping depot for its single manufacturing plant. The initial cost of the investment is $1 million. Efficiencies from the new depot are expected to reduce costs by $100,000 forever. The corporation has a total value of $60 million and has outstanding debt of $40 million. What is the NPV of the project if the firm has an after tax cost of debt of 6% and a cost equity of 9%?

A. $428,571
B. $444,459
C. $565,547
D. $1,000,000
E. None of the above is the correct NPV.

Reference no: EM1360896

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