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An auto plant that costs $ 1 5 0 million to build can produce a line of flex - fuel cars that will produce cash
An auto plant that costs $ million to build can produce a line of flexfuel cars that will produce cash flows with a present value of $ million if the line is successful but only $ million if it is unsuccessful. You believe that the probability of success is only about You will learn whether the line is successful immediately after building the plant.a Calculate the expected NPVNote: Do not round intermediate calculations. A negative amount should be indicated by a minus sign. Enter your answers in millions rounded to decimal place.a Would you build the plant?Suppose that the plant can be sold for $ million to another automaker if the auto line is not successful.b Calculate the expected NPVNote: Do not round intermediate calculations. A negative amount should be indicated by a minus sign. Enter your answers in millions rounded to decimal place.b Would you build the plant?
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