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Use the cash flows and competitive spreads shown in the table below. ($ millions) Year 0 Year 1 Year 2 Years 310 Investment 120 Production

Use the cash flows and competitive spreads shown in the table below. ($ millions) Year 0 Year 1 Year 2 Years 310 Investment 120 Production (millions of pounds per year) 0 0 42 82 Spread ($ per pound) .97 .97 .97 .97 Net revenues 0 0 40.74 79.54 Production costs 0 0 32.00 32.00 Transport 0 0 0 0 Other costs 0 22 22 22 Cash flow 120 22 13.26 25.54 NPV (at r = 10%) = 0 Assume the dividend payout ratio each year is 100%. a. Calculate the yearbyyear book and economic profitability for investment in polyzone production. Assume straightline depreciation over 10 years and a cost of capital of 10%. (Negative answers should be indicated by a minus sign. Leave no cells blank be certain to enter "0" wherever required. Do not round intermediate calculations. Enter your income answers in millions rounded to 2 decimal places and enter the rate of return as a percent rounded to 2 decimal places.)

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