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Blue Buffalo has a new 4-year project to evaluate. The InstalledCost of the project’s long-term assets is $200 million. The projectalso requires an initial Net Working Capital increase of $30million (no further changes in NWC are required) when implementedat t=0. This initial Net Working Capital of $30 million is alsoassumed to be fully recovered when the project is terminated at t=4years. The project’s assets fit into a 3 year IRS MACRSdepreciation schedule as follows: Year 1 -- 33%; Year 2 -- 45%;Year 3 -- 15%; Year 4 -- 7%. The project will be terminated exactlyfour years from today (t=4) and this project’s assets will then besold at an estimated $40 million salvage value. If the project isaccepted it will increase the firm’s revenue and operating costs by$110 million and $40 million, respectively, for each of thefollowing four years (t=1 through t=4). The corporate tax rate is40%. The cost of capital for this project is r=12% per year. Thisis a stand alone project. Calculate the NPV and IRR. Should thisproject be accepted or rejected?