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Breakeven cash inflows and risk. Boardman Gases and Chemicals is a supplier of highly purified gases to semiconductor manufacturers. A large chip producer has asked

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Breakeven cash inflows and risk. Boardman Gases and Chemicals is a supplier of highly purified gases to semiconductor manufacturers. A large chip producer has asked Boardman to buld a new gas production faclity elose to an existing semioonductor plant. Once the new gas plant is in place, Boardman will be the exclusive supplier for that semiconductor fabrication plant for the subseguent 10 years. Boardman is considering one of two plant designs. The first is Boardman's "standard" plant which will cost $38.8 million to build. The second is for a "custom" plant which will cost 553.5 million to build. The custom plant will allow Boardman to produce the highly specialized gases required for an emergency semiconductor manufacturing process. Boardman estimates that its client will order $11.9 million of product per year it the standard plant is constucted, but if the custom design is put in place, Boardman expects to seli $18.4 milion warth of product annually to its client. Boardman hes enough money to buld either type of plant, and, in the absence of risk differenoes, accepts the project wah the highest NPV. The cost of captal is 16.9% a. Find the NPV for each project. Are the projects acceptable? b. Find the breakeven cash inflow for each projoct. c. The firm has estimated the probabilies of achieving various ranges of cash inflows for the two projects, as shown in the table beeakeven cash inflow found in part (b)? d. Which project is more risky? Which project has the polens ally higher NPV? Discuss the riak-retum trade-olfs of the two propects. a. The NPV for project "itandars" is 1 (Round to the nearest cent) Data table

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