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61 NPV. Please use the information below for questions 6 Green Tech's Renewable Energy Project Analysis: GreenTech is considering investing in a new renewable
61 NPV. Please use the information below for questions 6 Green Tech's Renewable Energy Project Analysis: GreenTech is considering investing in a new renewable energy project. The project involves setting up a wind turbine farm, which requires an initial investment of $115 million. Financial analysts estimate that the benefits of the new project will be $20 million per year, starting at the end of the first year and lasting for eight years. After eight years, the benefits are expected to start declining by 2% per year indefinitely (Year 9 is the last year you the project yields $20 million). Assume the discount rate is 14%. Please calculate the following: 6. Net Present Value (NPV), in millions a. Internal Rate of Return (IRR) b. Payback Period, in years c. Do your NPV and IRR yield to the same conclusions? A) Yes, because IRR exceeds zero B) Yes, because IRR exceeds hurdle rate of 14% C) No, because NPV is too low D) No, because NPV is not equal to IRR 10. Why, and when you would expect to see a different relationship between these two estimates? If NPV and IRR yield different results, what measure should we primarily focus on in our decision- making process and why?
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