9.

9. An auto plant that costs $120 million to build can produce a line of flex-fuel cars that will produce cash flows with a present value of $180 million if the line is successful. If it is not successful, assume that the plant can be sold for $95 million to another automaker. You believe that the probability of success is only about 40%, and you will learn whether or not the line is successful immediately after building the plant. What is the expected NPV? a. $137.50 million b. $129.00 million c. $9.00 million d. $17.50 million e. $338.00 million