You are considering opening a new plant. The plant will cost $100 million up front and will take one year to build. After that, it is expected to produce profits of $30 million at the end of the year of production. The cash flows are expected to last forever.

A.Calculate the NPV of this investment opportunity if your cost of capital is 8%.

B.Should you make the investment?

C.Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.