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Please calculate the IRR and use IRR to determine the maximum amount of estimation error allowable for the cost of capital to estimate the decision
Please calculate the IRR and use IRR to determine the maximum amount of estimation error allowable for the cost of capital to estimate the decision unchanged!
You are considering opening a new plant. The plant will cost $101.4 million upfront. After that it is expected to produce profits of $292 million at the end of every year The cash flows are expected to last forever Calculate the NPV of this investment opportunity if your cost of capital is 6.8% Should you make the investment? Calculate the IRR. Use the IRR to determine the maximum amount of estimation error allowable for the cost of capital estimate to leave the decision unchanged Calculate the NPV of this investment opportunity if your cost of capital is 8.8% The NPV of this investment opportunity is $ 328 million (Round to one decimal place.) Should you make the investment? (Select the best choice below) OA No, because the NPV is less than zero OB. No, because the NPV is not greater than the initial costs c. Yes, because the NPV is positive OD Yes, because the project will generate cash flows forever. Calculate the IRR The IRR of the project is % (Round to two decimal places) Step by Step Solution
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