2. (12 points) A company is considering the two investment options described below. Option A. Build a new specialty chemicals plant. Internal discount rate: 12.0% pa. Land (Year 0): 80.70 million LFCI, (Year 0): $19.9 million Working capital (Year 0): $1.40 million (recovered at end of project) Net income after taxes (Years 1 through 10): 83.90 million per year Salvage value (end of Year 10): $2.0 million Option B. Invest $22.0 million in government bonds that will be worth $27.48 million in 10 years. (a) What is NPV of Option A? Answer: (b) What is NPV of Option B? Answer: Possibly Useful Information Conversion Symbol Formula Conversion Factor Formula P to F (F/P.i,n) (1 + i)" F to P (P/F.in) (1+i)* A to F (F/A.i,n) (1+1)"-1 Fto A (A/F.1.) (1 + i)" - 1 P to A (A/P, i, n) (1 + i)" (1 + i)" - 1 A to P (P/A.in) (1 + )" - 1 /(1+1)