Question
You are considering opening a new plant. The plant will cost $ 100.8 $100.8 million upfront and will take one year to build. Afterthat, it
You are considering opening a new plant. The plant will cost $ 100.8
$100.8 million upfront and will take one year to build. Afterthat, it is expected to produce profits of $ 30.8
$30.8 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 6.5 %
6.5%. Should you make theinvestment? Calculate the IRR. Does the IRR rule agree with the NPVrule?
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Essentials Of Investments
Authors: Zvi Bodie, Alex Kane, Alan Marcus
11th Edition
1260288390, 978-1260288391
