ASAP company proposes to invest $8 million in construction of a new plant to make widgets. Annual fixed costs associated with operating the plant are expected to be $2 million per year. A widget costs $20 per unit to manufacture (excluding fixed costs) and sells for $40 per unit. Assuming the plant lasts for 10 years and the cost of capital is 15%, answer the following questions. Assume taxes are not a factor in the analysis. Show work.

1. The net present value associated with constructing the plant assuming that the company sells 200,000 units annually.

2. The internal rate of return associated with constructing the plant assuming that the company sells 200,000 units annually.

3. The breakeven number of units sold annually that would generate a zero NPV.

4. The breakeven number of units sold annually that would generate a 15% IRR.