Express Shopping Centres Inc. is considering expanding into the vacant land next DOOR. This would require an outlay of $7.38 million. It is forecast that the additional complex will GENERATE earnings before tax of $960,000 next year and that these earnings would grow at a rate of 4% per annum into the foreseeable future. Express pays company tax at a rate of 30% and has a real cost of capital of 8.5%. The Reserve Bank of Australia has forecast inflation to be 2.5% over the foreseeable future. What is the NPV of the expansion project?

Express Shopping Centres Inc. is considering expanding into the vacant land next DOOR. This would require an outlay of $7.38 million. It is forecast that the additional complex will GENERATE earnings before tax of $960,000 next year and that these earnings would grow at a rate of 4% per annum into the foreseeable future. Express pays company tax at a rate of 30% and has a real cost of capital of 8.5%. The Reserve Bank of Australia has forecast inflation to be 2.5% over the foreseeable future. What is the NPV of the expansion project?