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Can the following problem be done in excel with equations You are considering opening a new plant. The plant will cost $96.4 million up front.

Can the following problem be done in excel with equations

You are considering opening a new plant. The plant will cost $96.4 million up front. It is expected to produce profits of $28.7 million at the end of every year, starting year 1. The cash flows are expected to last forever. There are 2 million shares outstanding.

a. Calculate the NPV of this investment opportunity if your cost of capital is 8.9%. Should you make the investment?

b. Current stock price is $50. What is the impact of this project on the stock price?

c. Draw the NPV vs r graph of this project. Calculate the IRR and locate it on the graph.

d. Based on the graph in c, discuss whether you would accept or reject a project if your companys cost of capital was between 3% and 5%. Please justify your answer.

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