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proposals for 3 mutually exclusive plants: A,B You work for a chemical company. They have and C. Esch of A, B and C makes a

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proposals for 3 mutually exclusive plants: A,B You work for a chemical company. They have and C. Esch of A, B and C makes a similar product, so the company will not build more than one of these projects (they are mutually exclusive). Plant A will take longer to get in production because of site acquisition and regulatory issues. MARR which the company's finance department reviews annualy, is set at 14.0%. An engineer bring you the following after tax cash flow forecasts, which have been reviewed and are considered acourate. Your company has ample funds for capital projects and is keen to invest but wants to pursue only one praject at this time. a. Determine the NPW (Net Present Warth) at MARR, simple peyback (you can simply give the year (integer) in which payback oocurs, calculated from startup (first year of positive cash low)), and the IRR (Intemal Rate of Return) calculated as a percent to one decimal place, for each of the three plants; enter the numbers in the table below. b. Which plant should your company invest in, and why? G. If your company later raisns a concen that there is a significant risk that the ife of the product may be shorter than the estimates because ofthe possible emergence of compeling products, but stil wants to proceed with ons of these planis, would you change your answor in (b)? Why or why not? All values in S Milions 330.00 80.00 70.00 80.00 90.00 80.00 70.00 50.00 $ 35.00 S 20.00 (780.00 140.00 50.00 5 150.00 50.00 (335 C0) 90.00 90.00 0.00 0.00 90.00 95,00 95.00 160.00 160.00 50.00 160.00 Payback

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