3. Company XYZ wants to expand its production capacity. It is analyzing a proposal for new place space on property adjacent to its current production facility. The convenience of this location makes this the only reasonable alternative for XYZ 's expansion plans. But they still need to decide whether it is a good investment or not. The upfront expenditures will cost the company $4.5 million to get ready for production. The new capacity is expected to have a 20 -year life and will generate annual after-tax cash flows of $0.8 million. XYZ's cost of capital is 15% (discount rate). a. Calculate the IRR of XYZ 's plant expansion project b. Should XYZ undertake the plant expansion project