You are considering opening a new plant. The plant will cost $ $97\mathrm{.}4$ million up front and will take one year to build. After that it is expected to produce profits of $ $30\mathrm{.}2$ million at the end of every year of production$($starting two years from$$ now$).$ The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is $8\mathrm{.}9\%.$ Should you make the$$ 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 $$$

$$

$214\mathrm{.}2$ million. $($Round to one decimal$$ place.$)$

Part $2$

You

should

make the investment. $($Select from the$$ drop$-$down menu.$)$

Part $3$

The IRR is

$$

enter your response here$\%.($Round to two decimal$$ places.$)$