New Flyer Industries Has Decided to Expand Its Production of Hybrid

Multiple Choice

New Flyer Industries has decided to expand its production of hybrid transit buses.The firm expects incremental cash flows of $20 million in the first year,growing by 2% every year thereafter.The upfront cost of the expansion is $95 million,and there are additional issuance costs for external financing of $12 million.If the New Flyer's WACC is 6.2%,what is the NPV of the project?

A) $228 million
B) $357 million
C) $381 million
D) $216 million
E) $369 million