A university professor has recently published a journal article that could lead to a new manufacturing process for Basic. The A Chemical Company has tested the new process, and the management is convinced that the variable costs could be reduced from $$150$ per ton to $$50$ per ton.

The minimum capacity for the new process is $3$ million tons per year, and the new process would cost $$600$ million.

The A Chemical Company has a large tax$-$loss carryover and is not likely to be paying income taxes in the foreseeable future.

The A Chemical Company and Nisson have been competing for a number of years, and, given similar cost structures, they have avoided any extreme forms of price competition. The $$50$ incremental profit per ton is deemed to be a fair return on the capital currently being employed.

The A Chemical Company has been borrowing long$-$term funds at a cost of $0\mathrm{.}14$ and has computed its weighted average cost of capital to be $0\mathrm{.}20.$ It knows that Nisson uses $0\mathrm{.}10.$ The A Chemical Company has been using $0\mathrm{.}20$ as a hurdle rate to evaluate efficiency$-$increasing investments in any mature activities with little chance of growth.

There is reason to think that there will be no new significant cost$-$saving developments in the future and that the demand for the product will stay constant at $2$ million tons per year if the price of $$200$ per ton is not changed. The physical life of the investment is extremely long. It is reasonable to assume that the equipment will have an infinite life.

Question:

create a Net Present Value analysis for company A and IRR using excel.