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An auto plant that costs $160 million to build can produce a line of flexfuel cars that will produce cash flows with a present value
An auto plant that costs $160 million to build can produce a line of flexfuel cars that will produce cash flows with a present value of $210 million If the line is successful but only $100 million if it is unsuccessful. You believe that the probability of success is only about 50%. You will learn whether the line is successful immediately after building the plant. a-1. Calculate the expected NPV. (Do not round Intermediate calculations. A negative amount should be Indicated by a minus sign. Enter your answers In millions rounded to 1 decimal place.) a-2. Would you build the plant? Suppose that the plant can be sold for $155 million to another automaker if the auto line is not successful. (Do not round Intermedlate calculations. A negative amount should be Indicated by a minus sign. Enter your answers In millions rounded to 1 decimal place.) b-1. Calculate the expected NPV. b-2. Would you build the plant? a-1. Expected NPV million a-2. Would you build the plant? b-1. Expected NPV million b-2. Would you build the plant
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