Details of McCormick Plant Proposal McCormick & Company isconsidering a project that requires an initial investment of $24million to build a new plant and purchase equipment. The investmentwill be depreciated as a modified accelerated cost recovery system(MACRS) seven-year class asset. The new plant will be built on someof the company's land, which has a current, after-tax market valueof $4.3 million. The company will produce bulk units at a cost of$130 each and will sell them for $420 each. There are annual fixedcosts of $500 thousand. Unit sales are expected to be 150,000 eachyear for the next six years, at which time the project will beabandoned. At that time, the plant and equipment is expected to beworth $8 million (before tax) and the land is expected to be worth$5.4 million (after tax). To supplement the production process, thecompany will need to purchase $1 million worth of inventory. Thatinventory will be depleted during the final year of the project.The company has $100 million of debt outstanding with a yield tomaturity of 8 percent, and has $150 million of equity outstandingwith a beta of 0.9. The expected market return is 13 percent, andthe risk-free rate is 5 percent. The company's marginal tax rate is40 percent. Should the project be accepted?

8. Find the NPV using the after-tax WACC as the discountrate.