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A proposed nuclear power plant will cost $1.2 billion to build and then will produce cash flows of $200 million a year for 15 years.
A proposed nuclear power plant will cost $1.2 billion to build and then will produce cash flows of $200 million a year for 15 years. After that period (in year 15), it must be decommissioned at a cost of $800 million. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in billions rounded to 3 decimal places.)
a. What is the NPV of the project if the discount rate is 3%?
b. What is the NPV of the project if the discount rate is 18%?
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