Shanghai Shipping Is Considering Investing in a Project That Requires

Multiple Choice

Shanghai Shipping is considering investing in a project that requires an after-tax initial investment of 156 million and is expected to produce after-tax cash inflows of $40 million for each of the next five years. The firm's cost of capital is 10%. Based on this information, the NPV of the project is _________ million and the firm should _________ the project.

A) $151.63; accept
B) -$151.63, reject
C) $4.37, accept
D) -$4.37, reject