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 build a new gas production facility close to an existing Semiconductor plant. Once the new gas plant is in place. Boardman will be the exclusive supplier for that semiconductor fabrication plant for the subsequent 10 years. Boardman is considering one of two plant designs. The first is Boardman's "standard" plant which will cost $38.3 million to build. The second is for a "custom" plant which will cost $52.7 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 $11.6 million of product per year if the standard plant is constructed, but if the custom design is put in place, Boardman expects to sell $17.3 million worth of product annually to its client. Boardman has enough money to build either type of plant, and in the absence of risk differences, accepts the project with the highest NPV. The cost of capital is 16.8% The NPV for project anderd is Round to hear cent) The NPV for project ouston's Round to the nearest cent) Are the projects Select the best newer below) CA Because the NPV for project and is positive project standard is accepte. Because the NPV for project custodia postiproject customers aceptable OB. Because the NPV for project and is positive project and is col. Because the NPV for project to negative project store in unable OC. Because the NPV for project ander is negative project and is unacceptable. Because the NPV for project customis negative project storia sobie OD. Because the NPV for project standaar is negative project and is unacceptable. Because the NPV for project customis positive project customisetable The PT for project stands is Round to the represent) The PMT for project customs Round to the nearest cent) 6. The fm has estimated the probabilities of achieving various renges of cash flows What is the probably each project will achieve the brave cash flow e. The firm has estimated the probabilities of achieving various ranges of cushions for the projects, as shown in the table What is the probably that each project will achieve the branch now found in parto? Select the best user below) OA The probably alreader will achieve how musly is to. The probably the project to achieve cash fons of OR. The probability that prodat wil schieve cash flows of muslys 25%. The probably a project to achieve cash fons of OC. The probably a project wil schieve cash fows of mually is 25. The probably that projection will achieve cash fons of annually is 25% OD. The probability that project standard wil achieve cash fons of so mually is oo. The probability that project ouston will achieve cash fous ots: annually is 25% d. Which project is more taky? Which project has the potentially higher PV? Discuss the risk un trade of the projects Select the best answer below) OA Bon projecoratandard and project contains are equally hapray taly OB. Project store is more risky and has a higher potential NPV. Project and has less risk and less tun, while projet ouston has more and more retum, thus the risk under OC. Project is more risky and has a higher potential NPV. Project stomose risk and less retun, while project standard has more risk and more eum, thus the diskretum trade-of OD. Both project standard and project "Oustomtare equally low risk projects. 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 build a new gas production facility close to an existing Semiconductor plant. Once the new gas plant is in place. Boardman will be the exclusive supplier for that semiconductor fabrication plant for the subsequent 10 years. Boardman is considering one of two plant designs. The first is Boardman's "standard" plant which will cost $38.3 million to build. The second is for a "custom" plant which will cost $52.7 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 $11.6 million of product per year if the standard plant is constructed, but if the custom design is put in place, Boardman expects to sell $17.3 million worth of product annually to its client. Boardman has enough money to build either type of plant, and in the absence of risk differences, accepts the project with the highest NPV. The cost of capital is 16.8% The NPV for project anderd is Round to hear cent) The NPV for project ouston's Round to the nearest cent) Are the projects Select the best newer below) CA Because the NPV for project and is positive project standard is accepte. Because the NPV for project custodia postiproject customers aceptable OB. Because the NPV for project and is positive project and is col. Because the NPV for project to negative project store in unable OC. Because the NPV for project ander is negative project and is unacceptable. Because the NPV for project customis negative project storia sobie OD. Because the NPV for project standaar is negative project and is unacceptable. Because the NPV for project customis positive project customisetable The PT for project stands is Round to the represent) The PMT for project customs Round to the nearest cent) 6. The fm has estimated the probabilities of achieving various renges of cash flows What is the probably each project will achieve the brave cash flow e. The firm has estimated the probabilities of achieving various ranges of cushions for the projects, as shown in the table What is the probably that each project will achieve the branch now found in parto? Select the best user below) OA The probably alreader will achieve how musly is to. The probably the project to achieve cash fons of OR. The probability that prodat wil schieve cash flows of muslys 25%. The probably a project to achieve cash fons of OC. The probably a project wil schieve cash fows of mually is 25. The probably that projection will achieve cash fons of annually is 25% OD. The probability that project standard wil achieve cash fons of so mually is oo. The probability that project ouston will achieve cash fous ots: annually is 25% d. Which project is more taky? Which project has the potentially higher PV? Discuss the risk un trade of the projects Select the best answer below) OA Bon projecoratandard and project contains are equally hapray taly OB. Project store is more risky and has a higher potential NPV. Project and has less risk and less tun, while projet ouston has more and more retum, thus the risk under OC. Project is more risky and has a higher potential NPV. Project stomose risk and less retun, while project standard has more risk and more eum, thus the diskretum trade-of OD. Both project standard and project "Oustomtare equally low risk projects