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XYZ Inc. is deciding whether to buy a new building.  The building will increase cash flows by $6,000,000 per year.  The building has a 20-year life and will be obsolete 20 years from today. The building is currently priced at $22 million.  The cost of the building will decline by $1,500,000 per year until it reaches 10 million, where it remains until it is obsolete.  The required rate of return is 10%.  Calculate the NPV of the project, assuming the project is started today. (Round to 2 decimals)

XYZ Inc. is deciding whether to buy a new building.  The building will increase cash flows by $6,000,000 per year.  The building has a 20-year life and will be obsolete 20 years from today. The building is currently priced at $22 million.  The cost of the building will decline by $1,500,000 per year until it reaches 10 million, where it remains until it is obsolete.  The required rate of return is 10%.  Calculate the NPV of the project, assuming the project is started today. (Round to 2 decimals)

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 16P: Shao Airlines is considering the purchase of two alternative planes. Plane A has an expected life of...
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XYZ Inc. is deciding whether to buy a new building.  The building will increase cash flows by $6,000,000 per year.  The building has a 20-year life and will be obsolete 20 years from today. The building is currently priced at $22 million.  The cost of the building will decline by $1,500,000 per year until it reaches 10 million, where it remains until it is obsolete.  The required rate of return is 10%. 

Calculate the NPV of the project, assuming the project is started today. (Round to 2 decimals)
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