The Boeing Corp

The Boeing Corp.is considering building a new aircraft,the 787--larger than the 747 and larger than the Airbus A380.The company's Renton WA Facility,where 747s are currently manufactured,would have to be expanded.Expansion costs are forecast to be $2.5B,incurred at t = 0.Also at time t = 0,before production begins,inventory will be increased by $1.855B.Assume that this inventory is sold at the end of the project at t = 2.The first sales from operation of the new plant will occur at the end of year 1 (t = 1) .Boeing forecasts sales of 220 planes in each of the two years.The plane will be sold for $130M each.The cost of manufacturing a plane is $115M.Annual overhead expenses are $775M.The construction facilities are classified as 15 year property.When the plant is closed it will be sold for $1B.The company is in the 34% marginal tax bracket.Boeing's cost of capital is 12%.What is the NPV for the proposed acquisition if the cost of capital is 12%?
MACRS Depreciation Rates

A) $1,025M
B) $1,148M
C) $2,343M
D) $3,242M
E) $3,602M