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Please provide steps and answer You are considering opening a new plant. The plant will cost $95.9 million up front and will take one year
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You are considering opening a new plant. The plant will cost $95.9 million up front and will take one year to build. After that it is expected to produce profits of $30.1 million at the end of every year of production. The cash flows are expected to last forever Calculate the NPV of this investment opportunity if your cost of capital is 7.4%. Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged The NPV of the project will be $282.83 million. (Round to one decimal place.) You should not make the investment. (Select from the drop-down menu.) The IRR is 11%. (Round to two decimal places.) The maximum deviation allowable in the cost of capital estimate is decimal places.) %. (Round to two 1 7.4 l/y PV PMT FV 0 378.7337 -95.9- 282.83 C) 406.76 95.9 30.1 0.074 95.9 130.1 1+r r(1+r) 30.10 95.90
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