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An auto plant that costs $100 million to build can produce a line of flex fuel cars that will produce cash flows with a present
An auto plant that costs $100 million to build can produce a line of flex fuel cars that will produce cash flows with a present value of $140 million if the line is successful but only $50 million if it is unsuccesful. You believe that the probability of success is only about %50. You learn whether the line is successful immediately after building the plant a) Would you build the plant? b)Suppose that the plant can be sold for $95 million to another automaker if the auto line is not succesfull. Now would you build the plant
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