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You are considering opening a new plant. The plant will cost $99.7 million upfront and will take one year to buld. Aner that, it is

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You are considering opening a new plant. The plant will cost $99.7 million upfront and will take one year to buld. Aner that, it is expected to produce profits o! $28.8 million at the end of every year of production. The cash flows are expected to last forever Calculate the NPV of this investment opportunity if your cost of capital is 7,8% Should you make the investment? Calculate the IRR. Does the IRR rule agree with the NPV rute? Here is the cash flow timeline for this problem 0 3 Forever Years 288 288 288 208 997 Cash Flow is millon Here is the cash flow timeline for this problem: Years 0 2 3 Forever 288 Cash Flow (5 million) -99.7 28.8 28.8 28.8 Calculate the NPV of this investment opportunity if your cost of capital is 78% The NPV of this investment opportunity is $ million (Round to one decimal place.) Should you make the investment? (Select the best choice below.) O A. No, because the NPV is not greater than the initial costs. OB. No, because the NPV is less than zero OC. Yes, because the NPV is positive. D. Yes, because the project will generate cash flows forever. Calculate the IRR The IRR of the project is % (Round to two decimal places.) Does the IRR rule agree with the NPV rule? (Select the best choice below.) O A. Since the IRR is less than the 7.8% discount rate, the IRR rule gives a different answer than the NPV rule. OB. Since the IRR exceeds the 78% discount rate, the IRR rule gives a different answer than the NPV rule. Does the IRR rule agree with the NPV rule? (Select the best choice below.) O A. Since the IRR is less than the 7.8% discount rate, the IRR rule gives a different answer than the NPV rule. OB. Since the IRR exceeds the 7.8% discount rate, the IRR rule gives a different answer than the NPV rule. OC. Since the IRR is less than the 7.8% discount rate, the IRR rule gives the same answer as the NPV rule. OD. Since the IRR exceeds the 7.8% discount rate, the IRR rule gives the same answer as the NPV rule

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