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. The land for the factory will cost $1,250.000 The factory will cost $2,620,000 to build and construction will take two years with construction
. The land for the factory will cost $1,250.000 The factory will cost $2,620,000 to build and construction will take two years with construction costs payable in equal installments at the start of each year. The factory will operate for 20 years. At the end of its 20 year lifespan, the land can be resold for $870,000 There is a 70% probability that the factory's net operating cash flows will be $579,677; however, there is a 30% chance that net cash flows will only be $250,845 . You may assume that net operating cash flows are received at the end of each year. a) What are the Expected net operating cash flows per year? (1 Mark)(Round your answer to 2 decimal places) b) What is the Internal Rate of Return for the project? (1 Mark Round your answer to one one-hundreth of a percent) c) What is the Net Present Value of the project? (1 Mark)(Round your answer to 2 decimal places) d) Should Anna recommend that the J Corporation build the factory? (2 Marks) Enter Answer Enter Answer Enter Answer Yes No Check only one box 1 Enter your Final Answer Here
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a To calculate the expected net operating cash flows per year we need to consider the probabilities and corresponding cash flows for each scenario Sce...Get Instant Access to Expert-Tailored Solutions
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