A major automotive manufacturer has announced that it will close a manufacturing plant in Ohio. The manufacturer has seen declines in automobile sales and believes that shutting down the factory will help solidify its financial position. If the plant if shut down, there will be large expenses in the first and third years, but there will also be significant cost savings in the other years, so that the cash flow stream for the proposed shutdown is as follows:

	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5
Cash Flow	-$7,000,000	$12,000,000	$5,000,000	-$5,500,000	$5,000,000	$5,000,000

The manufacturers cost of capital is 6.5%.

1. How would your answer to #5 change if

   1. The firms cost of capital rose to 7.5%?

   2. The State of Ohio offered the manufacturer tax breaks to keep the plant open?

   3. The United Auto Workers (UAW) Union announced a nationwide labor strike at all the manufacturers plants if the manufacturer shuts this one plant down?

Number 5 asked if we should keep the plant open or close it.