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Use the cash flows and competitive spreads shown in the table below. ($ millions ) Year 0 Year 1 Investment Year 2 Years 3-10 150

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Use the cash flows and competitive spreads shown in the table below. ($ millions ) Year 0 Year 1 Investment Year 2 Years 3-10 150 Production (millions of pounds per year) 0 0 56 96 Spread ( $ per pound) 1. 11 1 . 11 1. 11 1. 11 Net revenues 0 62. 16 Production costs 106.56 46.00 46.00 Transport 0 0 Other costs 0 36 36 36 Cash flow -150 -36 -19. 84 24.56 NPV (at r = 93 ) = 0 Assume the dividend payout ratio each year is 100%.Economic Period Book income ($ in | Book rate of return millions) (%) income ($ in millions) 0 0 2 3 5 6 8 10b-'l. What is the economic rate of return? [Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Eoonomil: rain of return h-2. Now compute the steadystate book rate of return [ROI] for a mature company producing polyzone. Assume no grown-I and competitive spreads. {Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.}

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