i). Answer :- Option A) $ 10.28 Million.
Explanation :- Net present value (NPV) of Project = Present value of cash inflows - Present value of cash outflow.
Present value of cash inflows = 4.0 Million * Cumulative present value factors for five years at 11 % (using present value table)
= 4.0 Million * 3.696 (approx).
= $ 14.78 Million (approx).
Present value of cash outflow = $ 4.50 Million. (Given in the question).
Accordingly, Net present value (NPV) of Project = 14.78 Million - 4.50 Million
= $ 10.28 Million. (Option A).
Conclusion :- Expected net present value (NPV) of Project = $ 10.28 Million. (Option A).
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