The management of ABC Inc. is considering investing in a research and development project to develop a new product. The initial cash outflow to fund the non-current assets is $20 million. In years 1 and 2, the company anticipates investing an additional $5 million and $3 million dollars respectively. The project is expected to generate an annual $15 million in cash from year 3 to year 6. In year 7, the company anticipates selling the business to investors for an amount of $45 million. Since this is a high -risk project, the cost of capital to finance the project is 15%. Management's hurdle rate is 30%. Should the company go ahead with the project?
-The net present value using the company's cost of capital is ________________________.

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The Answer of The management of ABC Inc. is considering investing in a research and development project to develop a new product. The initial cash outflow to fund the non-current assets is $20 million. In years 1 and 2, the company anticipates investing an additional $5 million and $3 million dollars respectively. The project is expected to generate an annual $15 million in cash from year 3 to year 6. In year 7, the company anticipates selling the business to investors for an amount of $45 million. Since this is a high -risk project, the cost of capital to finance the project is 15%. Management's hurdle rate is 30%. Should the company go ahead with the project?
-The net present value using the company's cost of capital is ________________________.

The Management of ABC Inc