An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $$40$ million at Year $0$ to mitigate the environmental problem, but it would not be required to do so$.$ The plant without mitigation would require an initial outlay of $$240\mathrm{.}31$ million, and the expected cash inflows would be $$80$ million per year for $5$ years. If the firm does invest in mitigation, the annual inflows would be $$84\mathrm{.}22$ million. Unemployment in the area where the plant would be built is high, and the plant would provide about $350$ good jobs. The risk adjusted WACC is $19\%.$

Calculate the NPV and IRR with mitigation. Enter your answer for NPV in millions. For example, an answer of $$10,550,000$ should be entered as $10\mathrm{.}55.$ Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to two decimal places.

NPV: $

$55\mathrm{.}96$

million

IRR:

$79\mathrm{.}11$

$\%$

Calculate the NPV and IRR without mitigation. Enter your answer for NPV in millions. For example, an answer of $$10,550,000$ should be entered as $10\mathrm{.}55.$ Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to two decimal places.

NPV: $

million

IRR:

$\%$An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed.

Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $$40$ million at

Year $0$ to mitigate the environmental problem, but it would not be required to do so$.$ The plant without mitigation would require an initial outlay of $$240\mathrm{.}31$

million, and the expected cash inflows would be $$80$ million per year for $5$ years. If the firm does invest in mitigation, the annual inflows would be $$84\mathrm{.}22$

million. Unemployment in the area where the plant would be built is high, and the plant would provide about $350$ good jobs. The risk adjusted WACC is $19\%.$

a$.$ Calculate the NPV and IRR with mitigation. Enter your answer for NPV in millions. For example, an answer of $$10,550,000$ should be entered as $10\mathrm{.}55.$

Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to two decimal places.

Calculate the NPV and IRR without mitigation. Enter your answer for NPV in millions. For example, an answer of $$10,550,000$ should be entered as $10\mathrm{.}55.$

Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to two decimal places.

NPV: $

million

IRR:

$\%$