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Question content area top Part 1 You are considering opening a new plant. The plant will cost $97.1 million up front and will take one
Question content area top Part 1 You are considering opening a new plant. The plant will cost $97.1 million up front and will take one year to build. After that it is expected to produce profits of $28.9 million at the end of every year of production (starting two years from now). The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.3%. 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. Question content area bottom Part 1 The NPV of the project will be $enter your response here million. (Round to one decimal place.) You should or not should? make the investment. The IRR is _% (round to the two decimal places). The maximum deviation allowable in the cost of capital estimate is _%(round to two decimal places)
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