Assume Ford Motors Expects a New Hybrid-Engine Project to Produce

Multiple Choice

Assume Ford Motors expects a new hybrid-engine project to produce incremental cash flows of $45 million each year, and expects these to grow at 3% each year. The upfront project costs are $380 million and Ford's weighted average cost of capital is 9%. If the issuance costs for external finances are $10 million, what is the net present value (NPV) of the project?

A) $324 million
B) $378 million
C) $360 million
D) $396 million